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