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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, 29 November 22
SEABORNE COAL FLOWS IN 2022 - SIGNAL
This year is crucial for the energy mix in European countries, as the EU has imposed new sanctions on Russia. It is important to emphasize that the ...
Friday, 25 November 22
APAC THERMAL COAL PRICES CORRECT FROM RECORD HIGH - FITCH RATINGS
Prices of Newcastle 6,000kcal/kg coal have corrected following falling European gas and coal prices, and more supply from Australia could help miti ...
Thursday, 24 November 22
VIETNAM BOOSTS COAL USE PLAN FOR 2030 AS G7 CLIMATE OFFER STALLS - REUTERS
Vietnam has increased its coal power target for 2030 under a revised draft energy plan, government documents seen by Reuters show, while renewables ...
Tuesday, 22 November 22
THE GENCON 2022 CHARTERPARTY - GARD
KNOWLEDGE TO ELEVATE
BIMCO has published a revamped version of the popular GENCON charterparty. Our author, Helena Biggs, was a member of the ...
Tuesday, 22 November 22
INDIA POWER BINGES ON COAL, OUTPACES ASIA - REUTERS
India’s coal-fired power output has increased much faster than any other country in the Asia Pacific since Russia’s invasion of Ukraine ...
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- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- PTC India Limited - India
- The University of Queensland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
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