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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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Thursday, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
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- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- GMR Energy Limited - India
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Aditya Birla Group - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Planning Commission, India
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
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