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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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Monday, 08 January 24
KOSPO TO BUY 80000 MT OF INDONESIAN LOW CALORIFIC VALUE COAL FOR FEB 2024
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for the supply of Indonesian Low Calorific Value Coal from qualified suppliers for Korean ...
Monday, 08 January 24
SEABORNE TRADE REACHES 12.4BN TONNES - CLARKSONS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
Monday, 08 January 24
CAPESIZES START THE NEW YEAR ON POSITIVE NOTE - BALTIC EXCHANGE
Capesize
This week the capsize market has been marked by a mix of activities and challenges. Despite a slow start following the Christmas and N ...
Friday, 05 January 24
MORGAN STANLEY SEES LOWER OIL PRICES IN 2024 ON OVERSUPPLY CONCERNS - REUTERS
Morgan Stanley sees Brent crude prices anchored near $80 per barrel in the first half in 2024 before declining towards the end of the year as it ex ...
Friday, 05 January 24
INDIA'S COAL OUTPUT RISES NEARLY 11 PC IN DEC TO 92.87 MT - PTI
India’s coal production increased by 10.75 per cent to 92.87 million tonne in December 2023 as compared to the year-ago period, an official s ...
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- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Barasentosa Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Australian Coal Association
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
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