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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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Wednesday, 19 October 22
WHAT WILL THE GAS MARKET LOOK LIKE IN A NET ZERO WORLD? - WOOD MACKENZIE
The global gas and LNG market faces a number of ‘great unknowns’. With the market in turmoil uncertainty abounds – from the scale ...
Wednesday, 19 October 22
MARKET INSIGHT - INTERMODAL
The LNG market remains extremely tight, and as a result adding further pressure on the vessel charter market, which is already stretched due to the ...
Sunday, 16 October 22
COULD A RETURN TO SHALE EXPLORATION BE PART OF THE SOLUTION TO EUROPE'S GAS SUPPLY PROBLEM? - WOOD MACKENZIE
The European gas market is in turmoil. Russia’s invasion of Ukraine has shaken things up, triggering a complete rethink of European energy st ...
Thursday, 13 October 22
THERMAL COAL PRICES RETREAT AS WINTER SUPPLY FEARS EASE - REUTERS
The prices of key thermal seaborne coal grades are retreating amid signs that supplies will be sufficient to meet winter demand in both Europe and ...
Thursday, 13 October 22
SPOT COAL BIDDING: CHINESE FIRM WANTS REVISED MECHANISM - BUSINESS RECORDER
Chinese company M/s Huaneng Shandong Ruyi (Pakistan) Energy Limited (HSR) has cautioned National Electric Power Regulatory Authority (Nepra) that i ...
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- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Standard Chartered Bank - UAE
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
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