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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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Friday, 16 September 22
WHEN IS A VESSEL'S INCOME EARNING CAPACITY AT RISK? 'CONTROLLED INCOME CAN BE A KEY OF SUCCESS' - MARASCO MARINE
Managing marine risks is not an easy task, which requires special knowledge and expertise on the subject per se. Customarily, big ship management c ...
Friday, 16 September 22
DRY BULK MARKET: EU’S BAN ON RUSSIAN COAL LIFTS DEMAND DESPITE ECONOMIC HEADWINDS - BIMCO
Highlights
– The Baltic Exchange Dry Index (BDI) peaked in late May and has since fallen sharply as lower Chinese demand and adverse glob ...
Friday, 16 September 22
BIMCO EMBARKS ON NEW STANDARD FOR “QUIET ENJOYMENT”
KNOWLEDGE TO ELEVATE
A newly set-up BIMCO drafting team involving a cross-section of shipowners, charterers, financing and leasing i ...
Friday, 16 September 22
INDIAN COAL PRODUCTION TO RISE 150 PER CENT IN 10 YEARS: CENTRE - EXPRESS NEWS SERVICE
The Union Ministry of Mines is expecting 150 per cent growth in coal production 10 years down the line as a result of coal reforms that had been us ...
Thursday, 15 September 22
MARKET INSIGHT - INTERMODAL
While the Organization of Petroleum Exporting Countries and its allies agreed on a 100,000 b/d output cut last week, oil flows are in the spotlight ...
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- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Posco Energy - South Korea
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- PTC India Limited - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
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