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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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Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Australian Coal Association
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Agrawal Coal Company - India
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
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