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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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Thursday, 26 January 23
AUSTRALIA'S CORONADO GLOBAL SEES COAL PRICES RISING ON RESUMING CHINA IMPORTS - REUTERS
Australia’s Coronado Global Resources said on Tuesday resuming metallurgical coal imports to China would likely push sea-borne coal prices hi ...
Monday, 23 January 23
CHINA'S MAJOR COAL-PRODUCING PROVINCE ACCELERATES DIGITAL TRANSFORMATION - XINHUA
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-the-clock t ...
Monday, 23 January 23
CHINA'S COAL-RICH PROVINCE SEES COAL PRODUCTION INCREASE IN 2022 - XINHUA
North China’s coal-rich province of Shanxi saw its coal production hit 1.31 billion tonnes in 2022, up 8.7 percent year on year, local author ...
Wednesday, 18 January 23
MARKET INSIGHT - INTERMODAL
From Feb 5, another price cap will be introduced to Russian fuels and oil products, adding to the one for crude oil, already in place from Dec. 3. ...
Tuesday, 17 January 23
FRAUD IS THE BIGGEST THREAT TO CARGO LOSSES - TT CLUB
The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within ...
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- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Australian Coal Association
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- The University of Queensland
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Billiton Holdings Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Mines - Canada
- Jorong Barutama Greston.PT - Indonesia
- Indian Energy Exchange, India
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- White Energy Company Limited
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- MS Steel International - UAE
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
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