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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 May 14
DRY BULK MARKET IS STILL STRUGGLING TO FIND FIRM FOOTING
COALspot.com: The freight market continued to be weak and the BDI closed slightly lower at 997 points or fell 1.96 pct week on week. The cape in ...
Friday, 09 May 14
RBCT SHIPPED 5.4 MMT OF COAL IN APRIL
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest coal export terminal in the world, shipped 5.45 million to ...
Friday, 09 May 14
DRY BULK MARKET: BANKRUPTCY TONNAGE UNLEASHED
Drewry’s latest Dry Bulk Forecaster saw freight rates on most routes declined in 2014’s first quarter as the previous quarter’ ...
Friday, 09 May 14
UNITED STATES COAL PRODUCTION SLIGHTLY SLIDES TO 82.4 MMST IN APRIL
COALspot.com – United States the world's second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal i ...
Thursday, 08 May 14
'TRIAL BY MEDIA, TRIAL BY LAW' - A REPORT FROM TRACK 1 OF BIMCO'S ANNUAL CONFERENCE DUBAI 2014
KNOWLEDGE TO ELEVATE
Aiming to bring a very different type of event into their annual conference, BIMCO presented ‘Double Jeopardy &n ...
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- PTC India Limited - India
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Parliament of New Zealand
- Latin American Coal - Colombia
- IHS Mccloskey Coal Group - USA
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
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