Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

News from around the globe

China plans to spin off pipeline assets into a new company, Iran raises its oil prices by 9%, India attracts bids for a new LNG import facility and Russia is adjusting its mining taxes.

China looks to create new pipeline business

China’s economic planning agency, the National Development and Reform Commission (NDRC) is leading talks on spinning off oil and gas pipeline assets from Sinopec and PetroChina Pipelines into independent businesses, according to people familiar with the plan.

China National Petroleum Corp. and its listed arm PetroChina Co. is the country’s biggest owner of pipelines, controlling about 77,000 kilometers (48,000 miles). China Petrochemical Corp. and its listed unit China Petroleum & Chemical Corp., or Sinopec, are the next largest with more than 30,000 kilometers.

The assets could be worth as much as $300 billion, according to an estimate by Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein.

Iran raises prices

Iran sold light crude oil at $56.26 per barrel on average in April, a $4.99 rise from $51.27 in March, according to a monthly OPEC report. Iranian Oil Minister Bijan Namdar Zanganeh has set an output target of 5.7 MMBOPD of crude oil by 2018.

Indian LNG attracting investors

India Gas Solutions, a joint venture of Reliance Industries Ltd. and BP, U.S.-based Excelerate Energy, Japan’s Mitsui and Co Ltd and a consortium of Norway’s Hoegh LNG and IMC infrastructure has also participated in an initial tender to build a gas import facility on India’s west coast, according to a Reuters’ report.

India currently has four LNG terminals with combined annual capacity of 20 million tons on the country’s west coast, but much of the country is still without energy. The new plan is for a 5 million ton per annum floating storage and re-gasification unit (FSRU) at the Mumbai port along with other infrastructure such as pipelines that would cost about $470 million, according to R. M. Parmar, chairman of Mumbai Port Trust.

The Mumbai port LNG project is expected to be completed by early 2018, Parmar went on to say.

Russia further altering tax code to balance budget losses

Russia will continue to cut its export duties on oil and light oil products while increasing its mining extraction tax (MET) for oil and gas, and export duties on fuel oils, according to Sputnik News. This so-called “Big Tax Maneuver” is a continuation of an earlier three-year project by the Russian Finance Ministry.

Russia’s export tax for crude oil is now 42%, but it is expected to drop to 30% by 2018. Meanwhile, the MET will grow from 775 rubles ($15.65) to 918 rubles ($18.54) within the next three years.

The change in taxes is expected to balance budget losses from export duties and provide new profits from the increase in MET. The tax reduction was introduced partially to align Russian export taxes with those of Kazakhstan, Russia’s Customs Union partner.

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.


Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.