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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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Wednesday, 07 December 22
MARKET INSIGHT - INTERMODAL
China’s coal imports from January to October were 230.1m mt, a decrease of around 10.7% y-o-y (2021 totalled 323.2m mt). The question is if t ...
Wednesday, 07 December 22
INDIA'S STEEL MINISTRY SEEKS IMPORT TAX WAIVER FOR COKING COAL - SOURCES REUTERS REPORTED
India’s steel ministry has asked the finance ministry for a waiver of import tax on coking coal among a slew of raw materials, as it scramble ...
Tuesday, 06 December 22
INDIA'S COAL PRODUCTION RISES 17% IN APR-NOV PERIOD - PTI
The country’s coal production increased 17 per cent to 524.20 million tonnes in the April-November period of the ongoing fiscal.
...
Tuesday, 06 December 22
INDONESIA AIMS TO STARTS COLLECTING COAL LEVY IN Q1 2023 - MINISTER, REUTERS REPORTED
Indonesia aims to establish a coal fund agency and start collecting a coal levy in the first quarter next year, to help ensure supply security for ...
Saturday, 03 December 22
COMPLEX RUSSIAN PRICE CAP MAKES MARITIME VISIBILITY A MUST - WINDWARD
Many commentators and analysts are speculating about the potential impact the Russian seaborne oil price cap will have on organizations and entitie ...
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- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Latin American Coal - Colombia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- The University of Queensland
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Australian Coal Association
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Parliament of New Zealand
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
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