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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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Monday, 12 September 22
COAL PRICE HIKE REMAINS DIFFICULT FOR CIL: CHAIRMAN TELLS ANALYSTS - PTI
Coal India on Thursday informed investors that increasing coal prices remains difficult in the current context when the economy is grappling with h ...
Friday, 09 September 22
GREECE WILL KEEP COAL-FIRED PLANTS RUNNING FOR LONGER AMID GAS CRISIS - REUTERS
Greece will keep seven coal-fired plants running for longer than previously planned as European countries adjust to a cut in gas flows coming from ...
Friday, 09 September 22
CHINA'S DROUGHT INTENSIFIES GLOBAL COAL SHORTAGE - REUTERS
China’s drought has sent coal prices surging as traders anticipate the lack of hydroelectric generation will force it to burn more coal to me ...
Thursday, 08 September 22
MOODY.S AFFIRMS ABM INVESTAMA'S B1 RATINGS FOLLOWING PLANNED MINORITY INVESTMENT IN COAL MINER; OUTLOOK STABLE
Moody's Investors Service has affirmed ABM Investama Tbk (P.T.)'s B1 corporate family rating (CFR), along with the B1 rating on its senior ...
Thursday, 08 September 22
MARKET INSIGHT - INTERMODAL
While the energy markets are historically stretched, Russian flows of crude oil are closely monitored as the oil trade is ultimately realigned. Mor ...
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- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Cigading International Bulk Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- India Bulls Power Limited - India
- Australian Coal Association
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- The University of Queensland
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- MS Steel International - UAE
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
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