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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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Tuesday, 17 January 23
CHINA'S SHANXI TARGETS 2023 COAL PRODUCTION OF NEARLY 1.37B TONS - XINHUA
China’s coal-rich province of Shanxi has set a coal production target of nearly 1.37 billion metric tons for 2023, according to a government ...
Tuesday, 17 January 23
MARKET INSIGHT - INTERMODAL
Rumor has it that the New Year has come, to set the pace in, for Russia to continue hostilities against Ukraine. Ten months on the go, into Russia& ...
Tuesday, 17 January 23
INDONESIA IS ACCOUNTING FOR 32.3% OF THE GLOBAL SEABORNE COAL MARKET IN 2022 - BENCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, Benchero ...
Tuesday, 10 January 23
INDONESIAN HBA IS SEEING A SPIKE IN JANUARY 2023 INSTEAD OF A SIGNIFICANT FALL IN DECEMBER 2022
COALspot.com: Indonesian Coal Price Reference up 8.43% in January 2023.
HBA is seeing a dramatic spike in January 2023 i ...
Sunday, 08 January 23
INDIAN COAL POWER PLANTS SHOULD BE COMPENSATED FOR 2022 FORCED GENERATION – REGULATOR : REUTERS
Indian power plants that rely on imported coal should be fully compensated when forced to supply electricity, the country’s power regulator s ...
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- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Malabar Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Attock Cement Pakistan Limited
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
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