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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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Sunday, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Planning Commission, India
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- CNBM International Corporation - China
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
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