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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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Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- MS Steel International - UAE
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Wilmar Investment Holdings
- Bank of Tokyo Mitsubishi UFJ Ltd
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Binh Thuan Hamico - Vietnam
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- The University of Queensland
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Thiess Contractors Indonesia
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