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