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