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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, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
Thursday, 22 December 22
AN OVERVIEW OF THE LNG MARKET - VESSELSVALUE
LNG values have continued to strengthen, spurred by skyrocketing earnings that have surpassed last year’s record breaking peaks. In November, ...
Thursday, 22 December 22
COKING COAL SLUMPS AS TALKS ON AUSTRALIA-CHINA TRADE RIFT LOOM - REUTERS
Chinese coking coal futures dropped more than 3 per cent on Tuesday (Dec 20), extending losses, as supply of the steelmaking input might increase i ...
Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited ...
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- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Baramulti Group, Indonesia
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- White Energy Company Limited
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Ceylon Electricity Board - Sri Lanka
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Thiess Contractors Indonesia
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Sical Logistics Limited - India
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- PTC India Limited - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- The University of Queensland
- Bukit Asam (Persero) Tbk - Indonesia
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
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