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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, 04 November 22
CHINA EXPANDS COAL TERM CONTRACTS TO ALL MINES TO STABILIZE MARKET - REUTERS
China has expanded long-term thermal coal supply contracts for 2023 to all coal mines and asked power utilities to source more of their demand thro ...
Thursday, 03 November 22
HANDYSIZE VALUES MOVING UP IN OCTOBER, WHILE LNG VALUES SKYROCKET - VESSELSVALUE
Handysize values have increased this month across most ages, following a period of decline. Values for generic 10 year old Handysizes have moved up ...
Thursday, 03 November 22
EUROPEAN GAS SUPPLY SURPLUS, NOVEMBER HBA DOWN TO US$ 308.2 PER TON - ESDM
European gas supply conditions have a major influence in determining fluctuations in the Reference Coal Price (HBA). The November 2022 HBA recorded ...
Wednesday, 02 November 22
MARKET INSIGHT - INTERMODAL
Only five weeks before western sanctions’ full effect, uncertainty over energy has markets and governments on the edge. What was initially th ...
Tuesday, 01 November 22
CHINA COAL TRADE DISRUPTED BY COVID OUTBREAKS AS WINTER LOOMS - REUTERS
China’s strict COVID-19 policy is constraining coal supplies and pushing up prices, industry officials and traders say, just weeks before the ...
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- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Economic Council, Georgia
- Australian Coal Association
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Globalindo Alam Lestari - Indonesia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Deloitte Consulting - India
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
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