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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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Monday, 19 December 22
ENERGY CRISIS FUELS COAL COMEBACK IN GERMANY - REUTERS
Coal has made a comeback in Germany this year, as Europe’s largest economy turns to the dirty fuel to power it through an energy crisis.
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Thursday, 15 December 22
MARKET INSIGHT - INTERMODAL
While observing the ship repair market very close to the end of the year, we are confident that shipyards worldwide are entering a new era. The nex ...
Tuesday, 13 December 22
STRONG COAL PRICES SUPPORT ROBUST EARNINGS AT INDONESIAN COAL MINERS - FITCH RATINGS
Fitch Ratings expects cash flow generation at Indonesian coal miners to remain strong in 2023, based on its forecast for coal prices to remain high ...
Tuesday, 13 December 22
BIMCO CII CLAUSE FINALLY RELEASED: DOES IT MAKE ANY SENSE OF CCI? - WFW
WHAT IS CII?
The new International Maritime Organisation’s (“IMO’s”) Carbon Intensity Indicator (“CII”) cer ...
Tuesday, 13 December 22
COAL BASE RAMPS UP ENERGY SUPPLY FOR WINTER NEEDS - XINHUA
Inner Mongolia Autonomous Region, China’s leading coal production base, has kicked its production into high gear to meet heating needs as col ...
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- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- IHS Mccloskey Coal Group - USA
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- McConnell Dowell - Australia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- MS Steel International - UAE
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
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