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