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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, 06 October 22
COAL INDIA ASKED TO ENHANCE SUPPLY TO THERMAL POWER PLANTS - IANS
With the festival season round the corner, Coal India Ltd. has been directed by the government to scale up dispatch to thermal power plants.
&n ...
Wednesday, 05 October 22
BUNKER PRICES DOWN AGAIN; IS THERE MORE TO COME? - INTEGR8 FUELS
It’s the economy…..”
VLSFO prices are now back to levels at the start of this year. After all the extremes of thi ...
Wednesday, 05 October 22
MARKET INSIGHT - INTERMODAL
Amid the looming western sanctions on Russia, the country is challenged to pivot its energy markets away from Europe and toward the East. Yet, Russ ...
Tuesday, 04 October 22
A REMARKABLE SHIFT IN FORTUNES HAS BEEN NOTED IN THE CRUDE OIL TANKER MARKETS - ALLIED SHIPPING
A remarkable shift in fortunes has been noted in the crude oil tanker markets over the past month, yet despite these shifts being seemingly in thei ...
Tuesday, 04 October 22
OIL PRICES COULD SOON RETURN TO $100 AS OPEC+ CONSIDERS ‘HISTORIC’ CUT, ANALYSTS SAY - CNBC
An influential alliance of some of the world’s most powerful oil producers is reportedly considering their largest output cut since the start ...
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- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Romanian Commodities Exchange
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Australian Coal Association
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
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