China in line for LNG from the United States

May 12 (UPI) -- Chinese companies can negotiate for long-term contracts to source liquefied natural gas from U.S. suppliers, the U.S. Commerce Department said.

The Commerce Department announced advancements with China under a 100-day action plan. Among the agreements steered in part by U.S. Commerce Secretary Wilbur Ross is a decision to allow China, which doesn't have a free-trade agreement with the United States, to receive LNG.

"The United States treats China no less favorably than other non-FTA trade partners with regard to LNG export authorizations," a statement from the Commerce Department read. "Companies from China may proceed at any time to negotiate all types of contractual arrangement with U.S. LNG exporters, including long-term contracts, subject to the commercial considerations of the parties."

The 100-day action plan covers nearly a dozen different areas, including broadening access to U.S. beef producers to the Chinese market. The Commerce Department said the arrangements add diversity to the Chinese economy, while giving U.S. business sectors a broader reach.

In an annual report this year, Royal Dutch Shell said LNG demand is on pace to grow at twice the rate of conventional gas. China and India, among the fastest growing economies in the world, are leading the pack in terms of growth in LNG imports.

Last year, U.S. supermajor Chevron announced an agreement with a Singapore holding company controlled by JOVO, a private energy company in China. The Chinese government under the terms of the agreement will receive a half million tons of liquefied natural gas per year over the next five years, with first deliveries slated for 2018.

The Commerce Department said the agreement gives China a chance to step away from coal in favor of the cleaner-burning natural gas.

Total authorized natural gas exports from the United States to countries that don't have a U.S. free-trade deal was19.2 billion cubic feet per day as of April 25. Special trade accommodations are necessary for non-FTA countries.