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