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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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Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
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- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Mercator Lines Limited - India
- PTC India Limited - India
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Australian Coal Association
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Kumho Petrochemical, South Korea
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
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