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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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- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Minerals Council of Australia
- PTC India Limited - India
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Sakthi Sugars Limited - India
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Australian Coal Association
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- White Energy Company Limited
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