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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 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
Saturday, 18 February 23
2023 MARINE FUEL MARKET PREDICTIONS - JOHN BERGMAN, AURAMARINE
The drive for decarbonisation we witnessed in 2022 has continued into 2023, demonstrating the shipping’s industry positive strides in the fas ...
Saturday, 28 January 23
COAL GROWTH BLIP NOT TO BE REPEATED - BALTIC EXCHANGE
As 2022 drew to a close, global coal demand looked set to end the year just 1.2% up on the previous year. But that small increase was enough to pus ...
Thursday, 26 January 23
CHINA'S COAL OUTPUT INCREASES IN DECEMBER 2022 - XINHUA
China’s raw coal output posted stable expansion in December 2022, official data showed.
The country produced 400 million tonne ...
Thursday, 26 January 23
COKING COAL NARROWS THE GAP ON THERMAL AS CHINA REOPENS - REUTERS
The premium of high-grade thermal coal over coking coal in Asia is shrinking as China’s re-opening and ending of a ban on imports from Austra ...
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- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Vizag Seaport Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
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