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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, 11 July 14
UNITED STATE'S MONTHLY COAL OUTPUT FALLS 5.53% IN JUNE
COALspot.com – United States the world's second largest coal producer, produced approximately 18.1 million short tons (mmst) of coal in a ...
Thursday, 10 July 14
SGX EXPANDS ACROSS THE BULKS WITH NEW COAL PRODUCTS
COALspot.com: Singapore Exchange (SGX) is expanding its bulk commodity derivatives offering by launching new coking and thermal coal products on 4 ...
Thursday, 10 July 14
HANDY: SMALL INCREASE; PANAMAX: POSITIVE TONE; CAPESIZE: PAPER VALUES REMAIN WEEK
Handy
It is a general increase in activity in both hemispheres whereas rates have just experienced a small increase. In the Feast we see stable a ...
Wednesday, 09 July 14
SHIP INVESTMENTS ARE TRENDING LOWER
Most ship owners are deeming current ship prices on the high side, refraining from making serious commitments in new acquisitions or newbuilding or ...
Wednesday, 09 July 14
INDIAN GOVERNMENT ADVISED POWER UTILITIES TO INCREASE COAL IMPORTS
COALspot.com: The government of India has advised power utilities to increase coal imports to meet fuel shortages and those that have fuel supply p ...
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- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- The University of Queensland
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- White Energy Company Limited
- Australian Coal Association
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- London Commodity Brokers - England
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Intertek Mineral Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Eastern Energy - Thailand
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
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