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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kaltim Prima Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Meralco Power Generation, Philippines
- Planning Commission, India
- Bhatia International Limited - India
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
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