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