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