tariffs

The unseasonably warm weather in the northern hemisphere and the rise of the global supply levels has resulted in record-low LNG prices. Adding to that, the coronavirus epidemic in China has reduced business and industrial activity, with January’s LNG imports dropping by about 10% year on year.

In a filing with the US FERC, Plains All American Pipeline said it would begin charging shippers an additional fee on its Cactus II pipeline to offset higher construction costs incurred in the wake of US steel tariffs.

Louisiana state granted a tax incentive to LNG Ltd. for its Magnolia project in Lake Charles. Although a beneficial development, it’s a drop in the bucket in the company’s progress toward FID.

The decision may alleviate some of the pressures oil and gas producers faced in the wake of their imposition last year. Canada and Mexico made up a combined 20% of US imports of oil country tubular goods in 2017.

The escalation of the trade war between the US and China could jeopardize several LNG megaprojects that are awaiting final approval.

Despite the uncertainty spawned by China’s recent decision to levy tariffs on US LNG imports, AGDC said it is still targeting a sale and purchase agreement with Chinese companies by the end of this year.

Industry analysts fear bad news for producers, as Chinese demand is expected to be a significant driver in new LNG production. China accounted for 15% of US LNG exports in 2017.

Operators are increasing capital budgets in the wake of tariffs and quotas initiated by the US government on steel imports, and the product exclusion process has revealed a host of other issues. If the tariffs are here to stay, what does industry hope to see moving forward?

How will a US steel tariff affect the oil and gas supply chain? Industry criticism points to a noticeable effect on construction expenditure and jobs, but where will the pain be most felt?