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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Dennis Roth who wrote (161748)	5/11/2012 5:29:56 PM
From: Dennis Roth	1 Recommendation Respond to of 206181

Analysis: China gas reforms spark investment boom reuters.com (Reuters) - China's big state companies, confident on the outlook for domestic natural gas reforms, are buying up local distributors and raising fresh capital - and making gas the hottest prospect for energy investment in the world's top energy consumer. The prospects for expansion and acquisitions also have China's natural gas distributors trading like growth stocks, instead of bog-standard utilities. China is pushing energy price reforms and spending billions of dollars on gas imports and infrastructure to cut the use of coal, which supplies over 70 percent of its energy but has made it the world leader in mine accidents and greenhouse emissions, and among the worst in air pollution. While nuclear power and renewables such as solar and wind are also benefiting from the shift, for now gas looks set to gain the most, since plentiful supplies and its use in industrial production and conventional thermal power plants mean it can be developed quickly and efficiently. "Natural gas is clean energy that is enjoying a lot of state policy support," said Liu Yang, chief investment officer of regional fund house Atlantis, which manages $4 billion and holds shares of Hong Kong-listed Chinese city gas distributors. "The city gas sector has been under-invested and is just about to take off," she said... [snip] More at link ...Analysts and industry executives, including PetroChina President Zhou Jiping, believe price reforms will gradually work their way across China, although prices may be held low and raised only gradually for certain regions or for households. Price increases will likely come sooner for industrial and commercial users, making shares of distributors serving that sector such as China Resources Gas and ENN a safer bet, analysts said. They also doubted higher prices would dent demand, with gas likely to remain affordable for industrial users even with 20 to 30 percent price increases. Helping to spur the drive for reform will be a steady rise in gas imports, which the Chinese government is encouraging to reduce the country's reliance on coal. The energy majors, as state-owned companies, are obliged to cooperate with government policy, but have been dragging their feet on boosting imports due to the losses from the price gap, and are stepping up the pressure for reforms. "If the import of generally more expensive LNG and this fairly expensive piped gas continues to rise, the government will finally face up to the problem of increasing the price of domestic onshore gas," said Al Troner, president of Houston-based Asia Pacific Energy Consulting. In a virtuous circle, higher prices will also encourage more imports, which are forecast by industry experts to account for half of China's total natural gas consumption by 2030, compared with 30 percent now. That would likely make China the world's largest importer of natural gas, displacing Japan. Rising prices will also encourage China to produce more gas domestically, where its proven reserves were 2.8 trillion cubic meters (tcm) at the end of 2010, similar to Australia's 2.9 tcm and Indonesia's 3.1 tcm, according to BP. Shale gas reserves could boost that sharply, with China's Ministry of Land and Resources revealing in March that China may hold 25.08 tcm of potentially recoverable shale gas resources. "You will have much more motivation for the incumbent, whether it is Sinopec, PetroChina or others, to develop the vast domestic reserves faster," said James Hubbard, head of Asia oil and gas research at Macquarie.