China Drying Network The increase in natural gas prices for non-residential use is favorable for natural gas extraction and production increase equipment, which will affect the economics of LNG heavy trucks in the short term.
I. Natural gas price increase background
The National Development and Reform Commission announced on June 28 that in order to protect the supply of natural gas market, promote energy conservation and emission reduction, and improve the efficiency of resource utilization, it was decided that since July 10, 2013, the prices of non-residential natural gas stations will be adjusted, and the price of natural gas for residents will not be Make adjustments. The non-residential natural gas price adjustment will divide natural gas into inventory gas and incremental gas.
The maximum price increase for stock valve station price per cubic meter does not exceed 0.4 yuan, of which, the maximum amount of gas used for chemical fertilizers does not exceed 0.25 yuan. The incremental valve station price is determined by 85% of the price of alternative energy (fuel oil, LPG).
Note: The price of city gate stations is the price at the natural gas ownership transfer point between upstream natural gas suppliers and downstream purchasers (including gas pipeline operators and urban pipeline natural gas operators).
At present, China's natural gas pricing uses a cost-plus method, which means that natural gas pricing is priced from the supply side according to the cost plus a reasonable profit to the manufacturer, and has nothing to do with the related substitutes. This leads to a rise in energy prices. Natural gas prices remain low. The ex-factory price and pipeline transportation price of natural gas are controlled by the central government, and the regional retail price is controlled by the local government. On the basis of the government segment pricing, the ex-factory price of natural gas plus pipeline transportation fees forms direct supply natural gas prices or natural gas city gate station prices. Natural gas city gate station price plus city gas distribution fees form the price of natural gas for urban users.
The long-term price increase is beneficial to the upstream enterprises to increase investment in natural gas development and solve the contradiction between supply and demand. At present, the natural gas price level in China is low, which does not fully reflect the changes in market supply and demand and the degree of resource scarcity, and is not conducive to the rational use of natural gas. In particular, the prices of imported natural gas in Central Asia have been more expensive in recent years, but they have been sold at a loss in domestic gas prices. This has created a “price upside-downâ€, which has severely curbed the supply from the upper reaches and has caused a situation in which the supply of natural gas in China has fallen short of demand. Therefore, natural gas has been rationalized. The price formation mechanism is extremely urgent.
Secondly, the implementation in different regions in July was different, but the price increase was a trend
From the point of view of the provinces that have now adjusted non-civilian natural gas prices, with the exception of Sichuan, which uses the highest integrated gate station price to adjust, other provinces are adjusting according to the state's maximum stock price of the stock gas and incremental gas, and then Each city (county) of the province should adjust its local conditions and formulate specific adjustment plans. Although some provinces have successively issued guidance on adjusting the price of natural gas for non-residential use, price adjustments have not yet been followed up across the province. It will take some time for the implementation of this gas price adjustment.
On July 26, the "First Financial Daily" reported that China National Petroleum Corporation issued a document requesting that the gas supply prices of LNG plants in various regions be raised to the highest prices for non-residential consumers. At present, more than 70% of the gas resources of LNG plants in China have been imported from PetroChina. According to the calculation of Anxis Infosys Energy, in accordance with the above pricing plan of PetroChina, the LNG production enterprises will increase the cost of single feed gas by about RMB 1/contract. Yuan/ton, the price increase is larger. At present, the average market price of domestic LNG is around 4,500 yuan/ton, so the price increase rate may be as high as 30%.
We believe that different provinces have different sources of gas and the adjustment range is different. From the collected information, the increase of incremental gas and stock gas is basically in the range of 10% to 30%. Some provinces require that CNGs for taxis and buses should not be adjusted. Or there is a subsidy.
LNG city pricing, its price development is also affected by market demand, LNG liquefaction plant may not be able to fully transfer the cost of pipeline gas prices go out, and if the increase is too large, will inhibit the needs of downstream users, in turn, will also be certain The degree restricts the rise of LNG prices. Therefore, the profitability of LNG liquefaction plants will be squeezed.
Attached to provincial price adjustments: Sichuan: From July 10 onwards, the price of non-residential natural gas in the province’s highest comprehensive gate station was raised from RMB 0.138 to RMB 2.143/fang, which was an increase of 8%; residents’ natural gas price and inventory gas The price of valve stations for chemical fertilizer production and the sales price of CNG for vehicles remain unchanged. Different from the National Development and Reform Commission's policy of adjusting separately according to the different standards of stock gas and incremental gas, Sichuan has a comprehensive weighted list of stock gas and incremental gas prices.
Jiangsu: The price of non-residential natural gas in the highest gate stations in Jiangsu Province reached 2.92 yuan/cubic meter of stock gas, and 3.3 yuan/cubic meter of incremental gas. This is consistent with national regulations.
Anhui: In the natural gas price adjustment plan, the price of the stock valve station in Anhui Province was 2.35 yuan per party, and the incremental valve station price was 3.23 yuan per party, which was in line with the provisions of the National Development and Reform Commission. After adjustment, the gas price of industrial gas in the West-East Gas Pipeline was increased by 0.291 yuan per square meter, and other gas prices were raised by 0.40 yuan, up by about 23%. In addition, on July 10, the natural gas used by vehicles in Anhui Province in the networked cities and counties in Anhui Province was uniformly adjusted to 3.98 yuan per party. Cities that use Sichuan gas are still set by the cities. The price of gas used in vehicles is based on the principle of increasing the price of gas. The price of the gasoline is adjusted to RMB 0.40, and the adjusted price is related to the price ratio of gasoline of 90# to 0.6:1. Compared with the use of gasoline, there is still a large price advantage. The 11 cities in the province, including Hefei, will gradually raise the rental price of taxis in order to reduce the impact of natural gas price increases for vehicles.
Jiangxi: Jiangxi Province, the highest price in the city's urban gate station, take inventory gas, incremental gas alone price method, the price set by the state to the highest gate station price in Jiangxi Province, plus the adjusted price of the province's pipeline composition. Jiangxi Province reduced the price of natural gas pipelines in the province from the 10th, and the province's natural gas transmission pipeline price in the province was adjusted from 0.50 yuan per cubic meter to 0.40 yuan (including business tax). The highest gate price for inventory gas and incremental gas formulated by the country was 2.22 and 3.1 yuan per cubic meter respectively. After adjustment, the price of non-residential gas in Jiangxi Province, which is the highest in the province's urban gate stations, is 2.62 yuan per cubic meter and 3.5 yuan per cubic meter. Natural gas refueling stations for vehicles are temporarily adjusted for the prices of natural gas for city taxis and buses. If some natural gas refueling sub-stations are tight in procurement and sales, and the operating difficulties are difficult, the local government will use temporary subsidies to ensure the normal supply of gas for taxis and buses.
The three cities of Changsha, Zhuzhou, Xiangtan, Changsha, Hunan, Hunan, and Hunan: The highest gate price for stored gas and incremental gas in Hunan Province, as specified by the state, is 2.22 and 3.1 yuan per cubic meter, respectively. From 0:00 on July 15th, the price of non-residential gas in the three cities of Changsha, Zhuzhou and Xiangtan will be uniformly adjusted to 3.48 yuan/cubic meter, which is actually adjusted to 0.48 yuan/cubic meter, of which Zhuzhou and Xiangtan contain 0.03 yuan/cubic meter. fund. In addition, the sales price of natural gas for vehicles in the three cities was adjusted from RMB 4.3/m3 to RMB 4.6/m3, which was actually adjusted at RMB 0.3/m3. The adjusted price difference between the sale price of natural gas for vehicles and the purchase price, after deducting the reasonable purchase and sale price difference of CNG filling stations, is included in the special storage for price adjustment funds, and is used for the adjustment of natural gas prices for vehicles. Subsidy expenses incurred.
Changde, Hunan: Starting from July 19, the sales price of non-residential natural gas in urban areas was 3.75 yuan/cubic meter, and the sales price of natural gas for vehicles was 4.60 yuan/cubic meter, which was an increase of 0.48 yuan and 0.65 yuan on the basis of the original price, but Changde City's comprehensive price adjustment is lower than Changzhutan and other surrounding cities and states.
Zhongshan: From July 25, 2013, Zhongshan adjusted the maximum price of natural gas for non-residential pipelines from RMB 4.90 to RMB 5.20 per cubic meter. The prices of natural gas for natural gas and natural gas for vehicles will not be adjusted.
Tianjin: Tianjin's maximum reserve price for inventory gas and incremental gas at the national portal is 2.26 and 3.14 yuan per cubic meter, respectively.
Second, the price of natural gas for vehicles was adjusted to RMB 4.20 per cubic meter, which was implemented on July 26, 2013. Third, the prices of other non-residential gases such as industry, commerce, heating, and power generation were adjusted to 3.25 yuan.
Gansu: The highest gate price for stock gas and incremental gas in the Gansu Province as prescribed by the state is 1.69 and 2.57 yuan per cubic meter respectively. The Gansu Provincial Development and Reform Commission has stipulated that since midnight on August 1, 2013, the gas supply price for upstream gas supply companies for refueling stations will be 2.35 yuan, and the external sales price for gas stations will be 3.10 yuan per cubic meter. After the adjustment of natural gas in Lanzhou City, the sales price of stored gas is 2.57 yuan per cubic meter, the sales price of incremental gas is 3.56 yuan per cubic meter, and the gas supply price for upstream gas supply enterprises for gas stations is 2.35 yuan; the external sales price of gas stations From the current 2.59 yuan adjusted to 3.10 yuan per cubic meter, price increase 20%.
Hebei: Hebei Province, the price of stock gas is 2.24 yuan/cubic meter, 3.18 yuan/cubic meter. It is reported that Hebei Province's industrial stocks rose by an average of 0.2 yuan, while other categories rose by 0.4 yuan. The highest wholesale price of compressed natural gas at the parent stations of Hebei Natural Gas Co., Ltd., Hebei Huayou Natural Gas Co., Ltd., and Hebei PetroChina Kunlun Automotive Gas Co., Ltd. is 2.80 yuan per cubic meter. The city gate station price and the wholesale price of compressed natural gas mother stations have been implemented since July 10, 2013.
Shandong: The highest gate price for inventory gas and incremental gas in the Shandong Province set by the state is 2.24 and 3.12 yuan per cubic meter, respectively. No specific adjustment plan was specified.
Harbin: The price of the highest gate station for stock gas and incremental gas in Heilongjiang Province as specified by the state is 2.02 and 2.9 yuan per cubic meter respectively. From the price adjustment of the Municipal Price Bureau, it was learned that the non-civilian natural gas sales price and the sales price increase of natural gas for vehicles in Harbin will be introduced in early August. Prior to the introduction of the price adjustment plan, the original sales price of 3.7 yuan per cubic metre of natural gas for vehicles and 3.8 yuan per cubic metre of non-civilian natural gas were still applied.
Third, the impact on the natural gas industry chain
In 2011, China's natural gas utilization structure was 8% for automotive gas, 9% for civilian gas, 34% for industrial fuel, 17% for power generation, and 21% for chemical raw materials. The market structure of natural gas during the "12th Five-Year Plan" period will be: city gas 32%, industry 31%, electricity generation 21%, chemical industry 16%. From a trend point of view, the proportion of urban gas (including civil, automotive, public services, heating, etc.) will increase in the future, and the demand for industrial gas will decline as a result of natural gas price increases.
Raising the price of natural gas for non-residential residents has a greater impact on the fields of power generation and industrial gas use. Production costs have increased significantly, which has reduced the production profits of enterprises, and may have hindered the transformation of production methods for “coal-to-gas†conversion in some enterprises. Urea, alumina and other industries have also been hindered. Increase in production costs. The profitability of natural gas production enterprises and gas stations is reduced by the price difference of natural gas. Terminal prices cannot be completely passed on due to the influence of local government regulations and the market. The profitability in the future will drop to a reasonable level. The current gross profit margin is expected to be around 30-40%. The negative impact of price increases in the intermediate production process is greatest.
We focus on the analysis of vehicle gas areas: In view of the current implementation, the increase in incremental gas prices in some regions is in the range of 10-30%. Retail prices in most regions have not fluctuate. The impact of this gas price adjustment on CNG taxis and buses can be ignored. Under the guidance of the Development and Reform Commission “Taxi industry, vehicle gas prices are equivalent to about 60% of gasoline pricesâ€, even after adjustment, natural gas is relatively Gasoline still has a large cost advantage, and local governments are also targeting such measures as subsidizing natural gas taxis. The impact of rising LNG gas source costs may affect the economics of LNG heavy trucks. We estimate that if the price rises to 70% of the fuel price, the LNG price is 5 yuan, the gasification rate is 1,400 yuan/ton, the price is 7,000 yuan/ton, and the investment recovery period is 1 year. LNG heavy trucks are still attractive. If the price of natural gas for vehicles rises to 80% of the fuel price, the LNG price is 5.7 yuan per square meter, and the gasification rate is 1,400 yuan per ton, the price is 7,980 yuan per ton. LNG heavy trucks can recover the investment after 2 years, except for taxis. In addition, the popularization and application of natural gas vehicles will slow down or even stagnate due to the loss of economic momentum. On July 22, the national average price of LNG plants was about RMB 5,080/tonne (RMB 3.6/party). If the price rises by 30% in the future, the price of LNG will reach RMB 4.7, which is 66% of the current price of diesel fuel, which is still economical. At the same time, we must also consider that in the future, the quality of diesel fuel will increase, and prices will increase simultaneously. In fact, the natural gas price for vehicles in most regions is still 60% of the fuel price, but due to the higher prices of LNG imported after 2010, the price increase of natural gas in many domestic markets, and the expected price reform is not yet clear, enterprises and relevant competent authorities Concerns over the increase in natural gas prices for vehicles have affected the promotion of short-term natural gas vehicles.
Based on the above analysis, we believe that natural gas price increases will have a greater impact on the profitability of LNG power generation, chemical and natural gas liquefaction production, and will basically have no impact on CNG taxis and public transport. The economics of LNG heavy trucks will decline, and the demand growth will slow down; Upstream natural gas extraction and production increase equipment. Regarding the rumors raised by PetroChina price increases, we believe that even if the gas source cost increases by 30%, the terminal prices may not be all-round transferred, and the second is to increase the price by 20-30%. The economic and environmental advantages of LNG heavy trucks still exist. Of course, the economy is short-term. With declining nature and customer wait-and-see effects, demand growth will slow down significantly.
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