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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, 13 December 22
AUSTRALIA TO CAP PRICES OF COAL, GAS TO DRIVE DOWN ENERGY BILLS - REUTERS
Australia will cap coal and gas prices for a year in a bid to shave utility bills for households and businesses hit by soaring costs because of the ...
Tuesday, 13 December 22
YANCOAL AUSTRALIA TO PREPAY $459 MLN DEBT AS RECORD COAL PRICES BOOST CASHFLOWS - REUTERS
Coal miner Yancoal Australia Ltd. said on Friday it intended to prepay $459 million of its debt on or around Dec. 16, as elevated coal prices were ...
Tuesday, 13 December 22
WHY COAL LEADS THE RISE IN COMMODITIES THIS YEAR - MARKETWATCH
This year marked a resurgence for coal, often known — and loathed — by environmentalists as the dirtiest energy source, with prices mor ...
Thursday, 08 December 22
BIMCO TO REVISE WAR RISK CLAUSES
Work to revise the BIMCO War Cancellation Clause 2004, the BIMCO War Risks Clause for Time Chartering 2013 (CONWARTIME 2013) and the BIMCO War Risk ...
Thursday, 08 December 22
COAL ROYALTY PAYMENTS BOOST AUSTRALIAN STATE'S BUDGET FORECAST - REUTERS
Australia’s Queensland state on Wednesday forecast a record surplus for the current financial year, largely driven by higher royalty payments ...
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- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Parliament of New Zealand
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Videocon Industries ltd - India
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
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