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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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Wednesday, 21 June 23
CHINA'S MAY COAL IMPORTS FROM AUSTRALIA RECOVER TO PRE-BAN LEVELS - REUTERS
Australian coal sales to China increased in May, as trade resumed between them even as overall coal demand weakened against an uncertain macroecono ...
Monday, 19 June 23
DROUGHT-DEPLETED HYDROPOWER DRIVES CHINA TO TURN TO COAL - REUTERS
China has leant hard on coal-fired power plants as well as wind and solar generators to make up for a shortfall in hydroelectric generation as a re ...
Monday, 19 June 23
CHINA COAL OUTPUT UP 4.2 PCT IN MAY - XINHUA
China’s raw coal output posted steady growth in May, official data showed.
The country produced 390 million tonnes of raw coal ...
Wednesday, 24 May 23
AMMONIA-FUELLED BULK CARRIERS WITHIN FIVE YEARS - BALTIC EXCHANGE
Within five years, ships powered by clean ammonia could be a feature on the iron ore trade routes between West Australia and East Asia.
A study ...
Tuesday, 23 May 23
CHINA'S APRIL COAL OUTPUT LEAPS 11% ON YEAR, BUT DEMAND DOWNTURN LOOMS - REUTERS
China’s daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing’s order to increase supply to ensu ...
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- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Economic Council, Georgia
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Indian Energy Exchange, India
- Planning Commission, India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Parry Sugars Refinery, India
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Videocon Industries ltd - India
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- The University of Queensland
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
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