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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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Sunday, 08 January 23
ELEVATED COAL PRICE A DRAG ON MARGINS OF DOMESTIC BASE METAL PLAYERS: ICRA
The increased price of coal continue to be a drag on the margin of domestic base metal players with no immediate relief in sight, rating agency ICR ...
Monday, 02 January 23
CHINA’S COAL CONSUMPTION TO PEAK BY 2035: REPORT - REUTERS
China’s primary energy consumption is likely to peak at nearly 6.03 billion tonnes of standard coal between 2030 and 2035, refining giant Chi ...
Thursday, 29 December 22
INDIA'S COAL DEMAND LIKELY TO PEAK BETWEEN 2030-2035: MINISTER - ANI
The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralha ...
Thursday, 29 December 22
RIO TINTO AND PARTNERS COULD RECEIVE AS MUCH AS $450M IN GOVERNMENT COMPENSATION FOR COAL PRICE CAP - THE GUARDIAN
Compensation payments for the Gladstone power plant remain the sticking point in the federal government’s coal price cap compensation negotia ...
Wednesday, 28 December 22
MARKET INSIGHT - INTERMODAL
The United Nations Conference on Trade and Development (UNCTAD) published a Global Trade Update on December 13th highlighting that global trade wou ...
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- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Planning Commission, India
- Posco Energy - South Korea
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Eastern Energy - Thailand
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Australian Coal Association
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- The University of Queensland
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Xindia Steels Limited - India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Altura Mining Limited, Indonesia
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