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