American Oil and Gas Reporter - July 2020 - 75

ConventionSection: Kansas Independent Oil & Gas Association
the membership breakfast and luncheon
are scheduled to take place inside the exhibit hall. "People go to that space to
visit not only with vendors, but with each
other. We would lose that element in a

virtual event," he reflects. "People enjoy
the camaraderie as well as the networking.
We can still offer that even as we take
precautions to do it safely."
Meanwhile, he notes, there also will

be two seminars scheduled for Monday
morning and two more that afternoon.
The theme for that evening's party is
"Stayin Alive," Cross adds, because "that
is what we are doing."
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Groups Eye China As U.S. LNG Buyer
WASHINGTON-The White House
should seek a mutual understanding with
the Chinese government on committing
to long-term purchases of U.S. liquefied
natural gas to fulfill China's energy obligations under the Phase 1 trade agreement,
the American Exploration & Production
Council and LNG Allies (U.S. LNG Association) suggest.
"As you are aware, many U.S. LNG
export project developers have received
all requisite permits from federal and
state authorities; have binding engineering, procurement and construction
contracts; have equity and debt financing. In other words, they are 'shovelready.' What they lack are enough longterm contracts for the sale of their LNG.
Without such contracts, they cannot
proceed for a 'final investment decision,'" the groups argue in a letter to
President Trump.
In his May 3 town hall held at the Lincoln Memorial, the president threatened
to terminate the Phase 1 trade agreement
with China if its government failed in its
promise to purchase more U.S. goods and
services, including energy and farm products, the two groups state. "Specifically,
you said: 'If they don't buy, we will terminate the deal. Very simple.' We understand your frustration and believe that
there is a solution-as least as it pertains to
energy-that could represent a win-win
result for both sides," they report.
In addition to increasing short-term
natural gas and oil purchases, AXPC and
LNG Allies suggest the president allow
China to meet a portion of its Phase 1
commitments by entering into new longterm sales and purchase agreements with
U.S. LNG export companies that are building or expanding LNG export facilities.
Long-Term Benefits
Under the Phase 1 agreement, China
committed to purchase $18.5 billion of
U.S. energy products, including LNG,
crude oil, refined products and coal, in
2020 and $33.90 billion in 2021. While it
is possible for China to meet a portion of

those commitments through the spot purchase of U.S. LNG, the groups argue it is
impossible to reach the full levels anticipated
under the agreement given current economic
and energy market conditions.
"Moreover, any Chinese LNG purchases in 2020 or 2021 are not likely to
create any new U.S. LNG construction
or upstream oil and gas jobs," the groups
indicate. "However, if Chinese companies
were to enter into new long-term LNG
contracts with U.S. LNG project sponsors,
then thousands of U.S. jobs could be created in a matter of months, even if the
actual delivery of the gas to China would
occur in a few years."
The groups urge President Trump to

immediately seek a mutual understanding
with the Chinese government that commitments to long-term purchases from
U.S. LNG facilities will count toward fulfilling its obligations under the agreement.
A policy brief, written by the Baker
Institute for Public Policy submitted in
support of the group's proposal, notes that
satisfying the Phase 1 agreement provisions
may establish a foundation on which the
two countries can build future trade agreements. The brief notes that a long-term
LNG deal would benefit China as well,
with the agreement effectively underwriting
the development of a full-fledged supply
chain boosting the country's economy for
many years.
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American Oil and Gas Reporter - July 2020

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