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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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Friday, 28 June 24
INDIAN POWER STATIONS STOCKED WITH BUMPER COAL SUPPLY AS TRANSPORT WOES EASE - BUSINESS STANDARD
Even as power demand has touched a historic high of 250 gigawatts (Gw) amid sweltering heat this June, India’s power stations are stocked wit ...
Friday, 28 June 24
INDIA'S CY23 COAL USE LARGER THAN NORTH AMERICA, EUROPE COMBINED - THE HINDU
For the first time, India’s coal consumption surpassed that of North America and Europe combined in the calendar year 2023, said Energy Insti ...
Monday, 24 June 24
PLN'S FINANCIAL SUSTAINABILITY RESTS ON ACCELERATED COAL RETIREMENT AND RENEWABLES DEPLOYMENT - MUTYA YUSTIKA
On 28 May 2024, Indonesia’s national electricity utility, PT Perusahaan Listrik Negara (PLN), released its financial report for 2023. Althoug ...
Monday, 24 June 24
INDIA'S COAL-BASED POWER DEMAND AT ALL-TIME HIGH, GOVERNMENT SAYS - REUTERS
India’s demand for coal-based power has risen by 7.3% this fiscal year to an all-time high, the government said in a statement on Wednesday.
...
Monday, 24 June 24
CHINA'S COAL INDUSTRY TURNS GREENER THROUGH INNOVATIVE APPROACHES - PEOPLE'S DAILY
At an opencast mine operated by Inner Mongolia Pingzhuang Coal Group Co. Ltd., a subsidiary of CHN Energy Investment Group (CHN Energy), a 14-meter ...
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- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Bangladesh Power Developement Board
- MS Steel International - UAE
- CNBM International Corporation - China
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
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