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