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