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