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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, 20 September 22
CHINA COAL OUTPUT UP 8.1 PCT IN AUGUST - XINHUA
China’s raw coal output posted stable expansion in August, official data showed.
The country produced 370 million tonnes of ra ...
Monday, 19 September 22
BUMA AUSTRALIA AWARDED A$400 MILLION CONTRACT EXTENSION BY BMA FOR GOONYELLA PROJECT
Press Release – PT Delta Dunia Makmur Tbk. (the "Company") announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA ...
Saturday, 17 September 22
CHINA WARNS COAL COMPANIES AGAINST DUAL CONTRACTS, KEEP PRICES STABLE - REUTERS
China’s state economic planner warned coal companies operating at ports in the Bohai Bay region to comply with their long-term contracts to k ...
Saturday, 17 September 22
IS A GLOBAL RECESSION IMMINENT? - WORLD BANK
Since the beginning of the year, a rapid deterioration of growth prospects coupled with rising inflation and tightening financing conditions, has i ...
Saturday, 17 September 22
FITCH RATINGS REVISES GLOBAL METALS & MINING PRICE ASSUMPTIONS
Fitch Ratings has revised its metals and mining price assumptions reflecting evolving economic growth expectations and demand and supply dynamics.
...
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- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Australian Coal Association
- Star Paper Mills Limited - India
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Parliament of New Zealand
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
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