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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Indian Energy Exchange, India
- White Energy Company Limited
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Formosa Plastics Group - Taiwan
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- San Jose City I Power Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Planning Commission, India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
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