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Thursday, 22 May 14
CNPC-GAZPROM DEAL A MEDIUM - TERM POSITIVE FOR CHINA'S GAS SECTOR
 Fitch Ratings says a 30-year deal in which Russia's OAO Gazprom (BBB/Negative) will supply gas to China National Petroleum Corporation (CNPC; A+/Stable) underscores CNPC's strategic role in the country's gas pipeline infrastructure and helps China to secure adequate gas supply over the medium term, especially for the north-eastern part of the country.
Under the deal, Gazprom will supply 38 billion cubic metres (bcm) of gas a year starting around 2018 at a price that sets a new benchmark for what China is willing to pay for natural gas over longer term contracts.
The agreement also demonstrates China's determination to switch to cleaner energy. China used around 168bcm of natural gas in 2013 and aims to use over 400bcm in 2020. The import agreement will meet close to 10% of China's consumption of natural gas in the medium term. Although China has substantial gas resources, exploiting the large unconventional reserves is technologically challenging. In 2013, the country imported nearly 30% of its gas requirement. We expect imports to increase as a share of total consumption in the medium term.
The new deal helps diversify the sources of China's natural gas imports, now mainly Turkmenistan and shipments of liquefied natural gas (LNG). It follows an agreement by CNPC in 2013 to take an equity stake in a Russian LNG project and buy gas from the project, which is controlled by Russia's OAO Novatek (BBB-/Stable).
While pricing for the Gazprom deal has yet to be announced, it appears from numbers reported in the media that the price will likely be at or above USD350 per thousand cubic metres (CNY2.2 per cubic meter), which is about 60% cheaper than China's current LNG imports and similar to the price for imports from central Asia. Although Fitch does not expect LNG imports to fall significantly because the use of natural gas in China is increasing, the agency believes the Gazprom deal will help reduce upward pressure on import prices in the medium term.
China has been and will continue to increase domestic gas selling prices that are controlled by the state, which should ensure profitability for operators like CNPC. For example, following gas price increases to-date, CNPC reported profits in its mid-stream gas operations in 4Q14 after losses during which high import costs sapped profitability.
For domestic gas producers, the Gazprom deal will provide incentive to further invest in natural gas exploration and production because the deal's expected price is higher than domestic production and as the authorities are expected to liberalise domestic natural gas pricing in the next couple of years. The indicative Gazprom deal price is at least 40% more than the current spot price for domestic gas, which ranges from CNY1 to CNY1.6 per cubic meter. Fitch believes the Gazprom deal is positive for CNPC, which holds over 60% of China's gas reserves and whose realised natural gas prices from its domestic productions in 2013 were around USD180 per thousand cubic metres.
CNPC will be responsible for building the pipelines and storage facilities in China under the deal. That the state has tasked CNPC to take on such important responsibility indicates that CNPC continues to play a strategic role in China's gas infrastructure, even though its subsidiary PetroChina said in May 2014 that it would eventually sell all of its stake in the First and the Second West-East Gas Pipeline to private investors.
To domestic city gas operators, especially in the north-eastern region, the deal soothes the concerns about gas supplies over the medium term. In Fitch's view, the agreement is positive for city gas operators such as China Resources Gas (BBB+/Stable), ENN Energy (BBB/Positive) and China Gas Holdings.
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- VISA Power Limited - India
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- The University of Queensland
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Minerals Council of Australia
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- McConnell Dowell - Australia
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
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