What’s new: China has completed its first yuan-settled import of liquefied natural gas (LNG), marking another milestone in the currency’s use in the global energy trade.
State-owned China National Offshore Oil Corp. bought the LNG from France’s TotalEnergies Tuesday, according to the official Xinhua News Agency.
The transaction involved more than 60,000 tons of the fuel that originated from the United Arab Emirates and was completed on the Shanghai Petroleum and Natural Gas Exchange (SHPGX).
The background: China’s yuan has been gaining traction as a currency for cross-border energy settlements in recent years, thanks to a concerted effort by Beijing to expand its use as an alternative to the U.S. dollar.
In December, President Xi Jinping said that China will work with Gulf nations, including the United Arab Emirates, to start yuan settlements of oil and gas trades on the SHPGX in the next three to five years.
In September, Russian state-run gas giant Gazprom PJSC signed a deal with China National Petroleum Corp. to settle half of their transactions in yuan and the other half in rubles. Since 2012, Iran has been accepting payment from China for its oil in yuan.
Last year, China imported 63.4 million tons of LNG, which accounted for more than half of its total natural gas imports, according to customs data.
Related: Xi Seeks Yuan Settlement of China Energy Trades With Gulf States
Contact reporter Zhang Ziyu (ziyuzhang@caixin.com) and editors Jonathan Breen (jonathanbreen@caixin.com) and Lin Jinbing (jinbinglin@caixin.com)
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