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