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