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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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Thursday, 26 June 14
COAL DIVESTMENT CAMPAIGNS COME WITH RISKY UNINTENDED CONSEQUENCES - WCA
Last week I presented to the Expert Group on investments in coal and petroleum companies, the body set up to advise the Norwegian Government on whe ...
Wednesday, 25 June 14
INDONESIAN COAL EXPORTS ON RISE; EARNINGS FALL ON LOWER SELLING PRICES
COALspot.com: Indonesia, one of the world's largest coal producer and the global largest multi grade coal exporter shipped around $1.84* ...
Wednesday, 25 June 14
THE PANAMAX MARKET REACHED FRESH LOWS FOR THE YEAR, SAYS INTERMODAL
COALspot.com: The Dry Bulk market closed off the week noting a slight decrease, but this image of stability is merely representative of freight rat ...
Wednesday, 25 June 14
SHIPPING: MARKET INSIGHT - YANNIS OLZIERSKY
During his recent visit in London, China's Premier, Li Keqiang, announced that China's economy, the world's second largest after the US ...
Tuesday, 24 June 14
INDONESIAN COAL MINER TARGETS RP 313 BILLION IPO
COALspot.com: Indonesian coal miner PT Mitrabara Adiperdana is aiming to raise up to Rp 313 billion to Rp 368 billion (approximately $26.133 millio ...
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- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Coal and Oil Company - UAE
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Minerals Council of Australia
- Economic Council, Georgia
- PTC India Limited - India
- Maheswari Brothers Coal Limited - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Tata Chemicals Ltd - India
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
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