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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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Friday, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- CNBM International Corporation - China
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- The University of Queensland
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
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