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