Sempra says coronavirus outbreak has not hit talks with LNG buyers

Energy infrastructure company Sempra Energy said the spread of coronavirus had not impacted talks with buyers of liquefied natural gas (LNG), easing some worries after the virus outbreak cut gas demand in China earlier this month.

Short-term sales of LNG into China, the world’s second largest importer of the fuel, almost ground to a halt earlier in February as the outbreak slowed economic activity and hurt demand, and buyers pondered legal action to avoid having to honor purchase agreements.

However, more recently, China appeared to be slowly recovering its appetite for natural gas, with LNG imports rising last week for the first time in five.

“In terms of conversations with counterparties ... we have a long-term view about supply and demand in the middle part of the decade and we’re really dealing with people ... that have a shared view of a potential infrastructure shortage,” Sempra Chief Executive Officer Jeffrey Martin said.

Even before the virus spread, global gas prices had been falling for months on mild winter weather in Europe and Asia, record stockpiles in Europe and slow economic growth because of the U.S.-China trade war.

Sempra, which develops, builds and invests in natural gas liquefaction facilities, said it expects to make final investment decisions this year to build two new LNG export plants, one in the United States and one in Mexico. (Reporting by Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta)

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