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