Chinese state-backed importers of liquefied natural gas are examining if they can provisionally halt contracts for the supercooled fuel, as the coronavirus outbreak depresses energy demand in the world’s second-largest economy.
Two sources briefed on the discussions said the move could see the temporary cancellation of contracts — under a condition known as force majeure — by companies such as China National Offshore Oil Corporation, and possibly Sinopec and China National Petroleum Corporation. Gas demand has fallen rapidly after the extended Chinese new year holiday, as Beijing struggles to bring the coronavirus outbreak under control by shutting down cities and restricting travel.
The companies did not immediately respond to requests for comment outside normal business hours.