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Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
 Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited direct near-term credit impact for energy-sector issuers rated by Fitch Ratings, according to the agency. However, the caps highlight that energy companies face mounting political risks that could influence investor perceptions of the sector and capex plans over the long term.
The caps have been proposed for 12 months, but even if they are extended, the direct impact should generally be limited if prices for coal and gas fall over the coming years, in line with Fitch’s base-case assumptions.
The near-term impact on Australian thermal coal miners’ financial profiles will be further mitigated, as typically around 80% of the thermal coal produced in the country is exported, and therefore is not subject to the cap.
The natural gas sector will be more exposed, as domestic demand accounts for a larger share of supply. Santos (BBB/Stable) and Woodside Energy Group (BBB+/Stable) are large suppliers of gas to the domestic market. Such sales account for more than 40% of Santos’s gas production, but we estimate that only around 15% of total production goes to the east coast markets that are exposed to the price cap.
Woodside’s domestic gas sales, including pipeline gas from the NWS Project, Pluto and Wheatstone, account for less than 6% of its gas production, with the rest exported as LNG. For both companies, most gas is already produced under long-term contracts, which will be unaffected by the caps, limiting the near-term impact. The proportion of output affected could nonetheless rise over time if the caps are extended beyond 12 months.
The prevalence of long-term supply contracts will also reduce the impact of the caps for most domestic electricity and gas retailers, including Origin Energy (BBB/Stable). If global energy prices remain high, it is possible that the caps could offer a competitive advantage to some retailers that rely more on short-term supply contracts. That said, the superior sourcing ability and flexibility in contracts should limit downside risks for large retailers. For electricity sales, the highest-cost power generator generally determines the wholesale energy market price, and we anticipate a neutral to marginally positive financial effect for entities like Origin that have flexibility in their generation portfolio.
The price caps will add to a perception that Australia’s mining sector faces mounting political risk, even though we do not believe they will have a major impact on Fitch-rated issuers in the near term. For example, the government has announced plans to implement a new system to protect sites important to Australia’s indigenous peoples. Firms in the sector, as in other parts of the world, also face political risks associated with official efforts to promote the transition to renewable energy sources.
Mounting political risk may influence investors’ perceptions of the sector, and therefore the terms on which companies are able to access finance. This could also have ramifications for M&A plans or long-term capex strategies. Nonetheless, it is likely to take time to assess the impact, which may also be offset by other market developments.
Australia’s parliament on 16 December passed legislation empowering the government to regulate gas prices, alongside an AUD1.5 billion relief package for firms and households. It remains unclear how the relief package will affect power and gas market dynamics, but we expect its impact to be temporary. The authorities plan to cap domestic gas prices at AUD12 per gigajoule. Domestic thermal coal sales prices in New South Wales and Queensland will also be capped at AUD125 per tonne.
Source: Fitch Ratings
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Thursday, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
Thursday, 22 December 22
AN OVERVIEW OF THE LNG MARKET - VESSELSVALUE
LNG values have continued to strengthen, spurred by skyrocketing earnings that have surpassed last year’s record breaking peaks. In November, ...
Thursday, 22 December 22
COKING COAL SLUMPS AS TALKS ON AUSTRALIA-CHINA TRADE RIFT LOOM - REUTERS
Chinese coking coal futures dropped more than 3 per cent on Tuesday (Dec 20), extending losses, as supply of the steelmaking input might increase i ...
Monday, 19 December 22
ENERGY CRISIS FUELS COAL COMEBACK IN GERMANY - REUTERS
Coal has made a comeback in Germany this year, as Europe’s largest economy turns to the dirty fuel to power it through an energy crisis.
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- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- The Treasury - Australian Government
- PTC India Limited - India
- Minerals Council of Australia
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Planning Commission, India
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
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