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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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Thursday, 13 October 22
OPEC DOWNGRADES CRUDE OIL DEMAND, AS WORLD ECONOMY ENTERS SLOWDOWN
Crude Oil Price Movements
The OPEC Reference Basket (ORB) declined m-o-m by $6.58 in September, or 6.5%, to average $95.32/b. Pressure from equ ...
Wednesday, 12 October 22
MARKET INSIGHT - INTERMODAL
Sale and Purchase activity during the first three quarters of 2022 has been remarkable.
Focusing only on Tankers and Bulkers, such v ...
Monday, 10 October 22
ENERGY TRANSITION BOOSTS GLOBAL LONG-TERM DEMAND FOR METALS - FITCH RATINGS
The energy transition will significantly increase demand for metals used in manufacturing of electric vehicles (EVs) and renewable power generation ...
Monday, 10 October 22
GLOBAL CEOS EXPECT IMPENDING RECESSION TO BE 'SHORT AND SHARP,' POLL SHOWS - CNBC
Global CEOs are anticipating a recession in the next 12 months, according to a new survey by professional services firm KPMG, which said more than ...
Thursday, 06 October 22
AUSTRALIA’S RESOURCES REVENUE TO HIT RECORD AMID UKRAINE CONFLICT - REUTERS
Australian resources and energy export earnings are forecast to jump 7% to a record A$450 billion ($290 billion) this fiscal year, bolstered by soa ...
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- Thiess Contractors Indonesia
- Australian Coal Association
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Karbindo Abesyapradhi - Indoneisa
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- The University of Queensland
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Ministry of Mines - Canada
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