【出版时间及名称】：2010年3月中国石油天然气行业研究报告
        【作者】：元大京华
        【文件格式】：pdf
        【页数】：94
        【目录或简介】：

Table of contents
Executive summary ............................................................................................... 3
The global picture................................................................................................. 5
China to aggressively ramp up domestic natural gas production ............................ 9
Unconventional gas to increase gas reserves ....................................................... 13
China’s natural gas price regime needs an overhaul............................................. 17
How should we invest to capture growth in the gas sector?.................................. 21
CNPC Hong Kong (135 HK); BUY............................................................. 30
Investment thesis .................................................................................................. 31
Valuation............................................................................................................... 33
Earnings outlook ................................................................................................... 36
Cash flow and balance sheet ................................................................................. 38
Investment considerations .................................................................................... 40
Company overview................................................................................................ 42
Company structure................................................................................................ 44
Company strategy ................................................................................................. 45
Risks to our BUY recommendation ........................................................................ 49
China Oil & Gas Group (603 HK); BUY ..................................................... 51
Investment thesis .................................................................................................. 52
Valuation............................................................................................................... 54
Earnings outlook ................................................................................................... 56
Cash flow and balance sheet ................................................................................. 59
Investment considerations .................................................................................... 62
Company overview................................................................................................ 64
Company strategy ................................................................................................. 68
Risks to our BUY recommendation ........................................................................ 70
China Resources Gas (1193 HK); HOLD................................................... 72
Investment thesis .................................................................................................. 73
Valuation............................................................................................................... 74
Earnings outlook ................................................................................................... 76
Cash flow and balance sheet ................................................................................. 79
Investment considerations .................................................................................... 82
Company overview................................................................................................ 84
Company structure................................................................................................ 86
Company strategy ................................................................................................. 88
Risks to our investment recommendation ............................................................. 89
Appendix A: Important Disclosures ..................................................................... 91

Executive summary
Natural gas has historically traded at a discount to crude oil. However, this discount
has widened visibly in recent years as crude has surged ahead. The current natural
gas price of US$5/mmbtu (million British thermal units) is equivalent to US$29/boe
(barrel of oil equivalent) in heat value terms, which is about a US$50/bbl discount
to US$80/bbl crude oil. We attribute the discount primarily to the lack of transport
infrastructure for gas. However, this discount is driving the energy industry towards
increasing gas consumption, particularly in applications that can replace oil. This
bullishness for gas is best illustrated by the recent scramble for unconventional gas
assets. In December last year ExxonMobil (XOM US; not rated) bought XTO Energy,
a shale gas producer in the US, for US$41 bn. Just a few days ago on March 7,
Arrow Energy (AOE AU; not rated), an Australian coal-bed methane producer,
reported it received an acquisition offer from a Shell and PetroChina joint venture
for US$3 bn.
With this rush, China will likely find it increasingly expensive to acquire natural gas
assets overseas; at the same time this should incentivize China to aggressively
increase its domestic production. China has been investing heavily in gas
infrastructure domestically to bring its gas to markets, and a pleasant surprise for
China in recent years has been the discovery of coal-bed methane as a potentially
large source of natural gas. China has also invested in shale gas, which could
potentially increase its natural gas reserves further.
However, to incentivize and hasten the development of natural gas production,
China will likely need to overhaul its gas price regime which significantly
underprices gas. We believe the soon-to-be-announced revised price regime will
likely incorporate a 10% YoY increase in gas prices over the next five years.
To invest in the gas theme, we recommend investors focus on downstream city-gas
operators as pure natural gas plays. These operators will likely enjoy strong volume
growth and sustained margins as prices move to be in line with international prices
over the medium term.
Our top pick is CNPC (HK). We believe PetroChina will continue to inject assets into
the company and support it with a natural gas supply to help expand the company
into the number one gas distribution company in China. We like China Oil & Gas too
as it is a small-cap CBM pure play with significant growth potential, in our view. We
are neutral on China Resources Gas as we have concerns over potential near-term
equity dilution, and the company may be required to lower its debt/equity ratio
after its recent aggressive acquisitions.