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