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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, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
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 ...
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- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- White Energy Company Limited
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
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