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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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- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
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