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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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Friday, 18 November 22
REALITIES OF LOI LIABILITIES - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
The cargo misdelivery claim in Trafigura Maritime Logistics Pte Ltd v. Clearlake Shipping Pte Ltd (Miracle Hope) [2022] E ...
Tuesday, 15 November 22
CHINA SEES RISING COAL STORAGE AMID SUPPLY PUSH - XINHUA
Coal stockpiles at China’s power plants have seen considerable increases, ensuring energy supply for the winter, the country’s energy r ...
Tuesday, 15 November 22
SEABORNE THERMAL COAL PRICES START TO EASE, BUT PROCESS IS UNEVEN - REUTERS
Prices for seaborne thermal coal have started to drop as fears of a winter energy crunch ease, but the rate of decline has varied across the differ ...
Thursday, 10 November 22
INDIA: THERMAL PLANTS HAVE ADEQUATE COAL STOCKS AT 25.6 MILLION TONNES, SAYS GOVT - IANS
The coal stock with domestic dry fuel-based power plants, as on October 31, was 25.6 million tonnes, the government said, adding that the availabil ...
Tuesday, 08 November 22
OUTLOOK ON CHINA’S WEAKENED BASIC MATERIALS SECTOR CLOUDED BY POLICY SWINGS - FITCH RATINGS
Fitch Ratings expects basic materials demand in China to improve qoq in 4Q22, driven by seasonally higher construction activity, solid infrastructu ...
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- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- MS Steel International - UAE
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Economic Council, Georgia
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Baramulti Group, Indonesia
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Energy Link Ltd, New Zealand
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Bhatia International Limited - India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
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