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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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Tuesday, 04 October 22
INDONESIAN COAL PRICE REFERENCE SURGE AGAIN TO RECORD HIGH
COALspot.com: Indonesian Coal Price Reference reached another record high in October as Russia's war in Ukraine continues to spark a surge in c ...
Sunday, 02 October 22
MISC STRENGTHENS ITS PARTNERSHIP WITH SEARIVER MARITIME
MISC Berhad (MISC) today announced that its subsidiaries Polaris LNG Three Pte. Ltd. and Polaris LNG Four Pte. Ltd. have secured long-term time cha ...
Thursday, 29 September 22
MARKET INSIGHT - INTERMODAL
This week, focus turns to the 38th APPEC Conference, where leading professionals from the global oil industry will discuss the future key drivers o ...
Thursday, 29 September 22
HIGH COAL PRICES REMAIN A CONCERN FOR DOMESTIC NON-FERROUS METAL COMPANIES - ICRA
According to ICRA on Monday, the high price of coal will have a negative effect on the profitability of domestic non-ferrous metal companies that m ...
Tuesday, 27 September 22
14% INCREASE IN EUROPEAN COAL DEMAND TO BE SHORT-TERM TREND - WOOD MACKENZIE
European seaborne thermal coal demand is projected to increase 14% or 12 million metric tonnes (Mt) this year to 98 Mt as it grapples with the curr ...
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- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- The University of Queensland
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Planning Commission, India
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PTC India Limited - India
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Parliament of New Zealand
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
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