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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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Saturday, 18 March 23
HEDGE TO OFFSET LNG VOLATILITY, TRADERS TOLD - BALTIC EXCHANGE
A shift in imports from Asia to Europe led to significant volatility in liquefied natural gas shipping last year, prompting industry experts to urg ...
Friday, 17 March 23
INDONESIAN COAL PRICE REFERENCE UP AROUND 2.17% IN MARCH 2023
COALspot.com: Indonesian Coal Price Reference up around 2.17% in March 2023.
According to the new HBA regulation No. 41.K/MB.0 ...
Saturday, 11 March 23
MARKET INSIGHT - INTERMODAL
Uncertainty over the recovery of Chinese demand, demand destruction in Europe, as well as weather conditions will pivot the LNG market this summer. ...
Wednesday, 08 March 23
INDONESIAN COAL REFERENCE PRICE FORMULA HAS OFFICIALLY CHANGED
Indonesian Minister of Energy and Mineral Resources has officially changed the guideline for determining the benchmark price for the sale of coal c ...
Thursday, 02 March 23
INDIA'S SEABORNE CRUDE OIL IMPORTS IN 2022 INCREASED BY 11.5% YOY - BANCHERO COSTA
2022 has turned out to be a very positive year for crude oil trade, despite the surging oil prices and risks of economic recession, Banchero Costa ...
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- Trasteel International SA, Italy
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Global Coal Blending Company Limited - Australia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- White Energy Company Limited
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- IEA Clean Coal Centre - UK
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Planning Commission, India
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
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