Chinese consumers may buy natural gas at more than five times current U.S. futures prices as the government eases control over domestic costs, opening the world’s biggest energy market to more overseas sellers.
Wholesale, or city-gate gas, in China’s Guangdong and Guangxi provinces, where the country is running a pilot program linking prices to oil, cost as much as 2.74 yuan (43 cents) a cubic meter since December, according to the National Development and Reform Commission. That’s about $12 per million British thermal units, or five times more expensive than benchmark U.S. futures in New York.
China plans to extend the pricing nationwide in two to three years, according to the official Xinhua News Agency, potentially boosting imports from North America, where Henry Hub futures contracts fell to a 10-year low in April. While China seeks to boost the use of cleaner fuels such as gas, retail price caps are discouraging energy companies from increasing supplies because they have to pay international rates and sell at a loss on the domestic market.
“The price reform helps to create an environment that supports a high cost of gas,” Gavin Thompson, a manager at Wood Mackenzie Ltd. in Beijing, said in a telephone interview May 30. “U.S. pricing will be attractive to the Chinese buyers. Looking at our view of delivered cost into east coast China and Henry Hub gas prices, U.S. Gulf Coast exports look competitive.”
Executives from the world’s biggest gas companies including Royal Dutch Shell Plc, Exxon Mobil Corp., OAO Gazprom and PetroChina Co. are likely to discuss the prospect of rising North American exports to Asia when they meet in Kuala Lumpur this week for the World Gas Conference. Shell Chief Executive Officer Peter Voser last month called gas “the fuel of the future.”
U.S. LNG
The U.S. may export about 40 million metric tons of liquefied natural gas a year by 2022 as low-cost supplies from shale deposits encourage shipments to Asia, Jen Snyder, a Boston-based analyst at Wood Mackenzie, said May 22. LNG is natural gas chilled to minus 260 degrees Fahrenheit (minus 162 degrees Celsius), liquefying it for shipment by tanker.
U.S. exports will cost Asia buyers $9.35 per million Btu, based on a Henry Hub price of $3 and after accounting for freight rates, according to a May 29 presentation by Cheniere Energy Inc. (LNG), the Houston-based company that’s developing the nation’s largest LNG export terminal in Louisiana. That compares to $11.08 per million Btu that China paid on average in April, according to customs data.
Price Slump
Gas futures slumped to $1.91 per million Btu on the New York Mercantile Exchange on April 19, the lowest price since September 2001. The contract for July delivery was at $2.348 per million Btu today in New York.
“China will be seriously importing gas from North America as it offers potentially lower prices compared to other sources,” Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein, said in a telephone interview May 30. “There is a lot of interest from Asian buyers, but the question is very much a political one in terms of how much the U.S. will allow to export.”
If China’s gas pricing reform is rolled out nationwide, retail gas prices could double to as much as 5 yuan per cubic meter, from 2.5 yuan currently, Beveridge said in a May 9 report. Wellhead prices would be three times those implied by U.S. forward price curves, according to Beveridge.
Import Surge
China may purchase an additional 10 million tons of LNG a year by 2030 from overseas markets, including North America, South America and Africa, on top of a further 10 million tons from traditional sources in Asia and the Middle East, Fereidun Fesharaki, the Singapore-based chairman of Facts Global Energy, said in a report last month.
China, which aims to double gas use in five years by 2015, increased overseas purchases of LNG by 31 percent to a record 12.2 million tons last year, according to Chinese customs. Purchases may more than double to 30 million tons by 2015 and rise fourfold to 50 million tons by 2020, according to Bernstein.
The nationwide implementation of the pricing system may make gas too expensive for some industries and reduce China’s competitiveness, according to Beveridge, who forecasts the country’s prices may rise by 50 percent in the next two to three years as the government extends the trial.
Gas in Guangdong and Guangxi is linked to a benchmark price in Shanghai that’s based on the cost of imported fuel oil and liquefied petroleum gas in the city, the National Development and Reform Commission said Dec. 27. Transportation costs are added to the Shanghai price to reach the final price for the regions, according to NDRC.
Political Sensitivity
While market prices in China may be attractive to overseas suppliers, exporting low-cost fuel to a strategic competitor may be politically sensitive for the U.S., said Thompson at Wood Mackenzie. China may also view U.S. LNG supplies as relatively risky because export terminals require government approval, creating uncertainty, he said.
While future gas demand will be met with supplies from shale reserves, U.S. exports are likely to remain limited to keep prices from declining, according to Christophe de Margerie, chief executive of Total SA, Europe’s third-largest energy company. De Margerie will be in Kuala Lumpur this week.
Consideration of licenses to export gas from the U.S. will have to wait until at least the third quarter, when a study is completed after a delay of several months, according to the U.S. Energy Department. The assessments were initiated after complaints from some U.S. lawmakers, who said sales overseas might increase prices at home.
To contact the reporters on this story: Winnie Zhu in Singapore at wzhu4@bloomberg.net; Dinakar Sethuraman in New Delhi at dinakar@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
Shopping and dining while having their lives saved! - Examiner
I was at the Coconut Grove Gallery Walk this past weekend and noticed a lady walking with an oxygen tank, it was unobtrusive except for the hose going up to her nose. I didn't ask, but after we engaged in conversation (we all do at gallery walks), she mentioned she was in Miami, visiting from Central America, because she was here for medical treatment. She was seeing an oncologist and getting treatment at one of the local hospitals.
What I found interesting was that while here, she was enjoying the art at the Gallery Walk and also visiting restaurants, shopping malls and spending money on a hotel stay while here for her treatment; and she had her whole family with her, all here enjoying what the city has to offer, spending money and having her live literally saved in the process!
Tourism was way up in Miami in 2011 thanks in large part to a 7.2 percent increase in international visitors to 6.5 million. But how many were here not so much to enjoy the sand, sun and fun, but for medical treatment? Many! That's quite a large chunk of the tourism budget.
Large amounts of money flood the area in the form of medical tourism and many people in the know, cater to these special clients. An unknown aspect of medical tourism is that the tourists pay for their own medical care, they don't use medical insurance, and in the process, they not only spend money on hospitals, doctors and medical treatment, but they spend money on hotel stays, restaurant, shopping and more and the patient usually has family members along for the duration.
Navigating the US healthcare system is no simple feat, even for us Americans. Patients needs much needed medical treatment, but how do they begin? This is where medical concierge companies come into play, like <a href="http://www.ornoa.com/">ORNOA</a> (Oncology Referral Network of America).
ORNOA is a patient navigation service developed by Miamian Maria Freed. They've treated over 500 patients in almost two years.
"We provide patient navigation services for these members, and also direct patients to non-members because the goal is to match the patient to the most appropriate provider in South Florida. In light of the continued loss of professional income and the impending 27.4% reduction in Medicare reimbursement , local private practice physicians are starting to pay attention to the international market," says Maria.
In the last 18 months, 70% of the patients have been insured, and 30% were self pays. Medical concierge services negotiate fees for patients that have no insurance. Physicians are attracted to international cases because they offer higher reimbursement than Medicare or Medicaid local patients. In Miami Dade 1/3 of residents have no insurance coverage.
International health insurance carriers are looking for value, and no longer automatically refer to the big hospitals in South Florida, because they deem their fees as too high and service offered to their patients is not optimum. Medical Tourism continues to evolve with many more patients seeking care in places other than the U.S. However, there are still more people who travel to the U.S. for healthcare yearly (approximately 3 million) than travel to any other country.
The strongest service lines for international patients coming to South Florida include oncology, orthopedic surgery, cardiovascular, general surgery and pediatrics.
The next time you're lying out at the pool and shopping at Dadeland, consider the fact that the person right next to you may just have had their life saved last week!
Wholesale Gold Group Launches New Video Report on Homepage - YAHOO!
Wholesale Gold Group has released a video to accompany their latest report.
San Francisco, CA (PRWEB) June 04, 2012
Michael MacDonald and the team at http://www.WholeSaleGoldGroup.com has just put the finishing touches on a video that discusses the “what, why, when, where and how” of precious metal investing. The video report covers subjects such as currency devaluation, saving for retirement and the future of precious metal prices.MacDonald notes that he decided to replace the existing video on the site in order to help promote his two popular information products: The Silver Bomb and the Wholesale Gold Group Gold and Silver Investing Kit: “The video we used to have on the homepage was a person greeting to site visitors. However, I decided that I wanted to show our new visitors that I knew my stuff when it came to gold and silver investing. That’s why our new video is packed with practical tips related to investing. It also complements our free Gold and Silver Investing Kit which goes into much more detail about why precious metal investing is the premier investment of the decade.”
What information does the new video contain? According to MacDonald, the video takes a big picture approach to the current world economy: “As anyone who reads the newspapers today probably finds, there’s an overwhelming amount of information out there about the current world economy. From the potential collapse of the Euro to US unemployment, this deluge of information can make it hard for the average investor to see the forest for the trees. The video’s primary goal is to help people quickly make sense of what’s going on and why precious metal investing is the logical investment for the short and long-term. Because this is so important, we have the video running free on our homepage and can be watched without having to buy or sign-up for anything.”
Those that want to watch the video for themselves should head to: Wholesalegoldgroup.com
Michael MacDonald
Wholesale Gold Group
1-800-227-5866
Email Information
Google Shopping Expands Trusted Store Program - Auctionbytes.com
Lost in the major announcement last week that Google Shopping was eliminating free listings was the news that Google is expanding its "Trusted Stores" program. One startup benefited from Google's renewed attention to the Trusted Store program, while another is in the process of suing Google over the badges.
Google launched Trusted Stores last year, and BuySafe filed a lawsuit against Google claiming patent infringement in December. Despite the lawsuit, Google acquired a company called KikScore last month to help it validate online merchants' "trustworthiness" through the Trusted Stores badge. KikScore provides trust seals for small businesses. (KikScore has patents of its own, which might have influenced Google's decision to acquire the company.)
When Google launched Trusted Stores, here's what KikScore had to say
Franky, Google looks to be focused on shipping and customer service issues, but does not really cover some other items that are important to the trust calculation for shoppers and these include:
1) Who is behind the website?
2) Where is the website hosted, is it in a country that has a high incidence of fraud?
3) Who is behind the business that runs the website?
4) Who manages the business and do they have a track record of financial reliability or a propensity for committing fraud?
5) Does the business owner or business have any liens or judgements pending against them?
Meanwhile, the BuySAFE lawsuit claims that the Google Trusted Stores program infringed on BuySafe's patent. The case continues to slog on - the lawyers were scheduled to explore ADR (dispute resolution) in April. A Markman Hearing is set for February 2013, and discovery is due by April 17, 2013.
Last week, Google Shopping Vice President of Product Management Sameer Samat told EcommerceBytes Google would begin giving merchants the option to participate in Google Trusted Stores over the summer. Currently Google Trusted Stores has piloted with only a handful of merchants.
In response to a request for more information on how Google verifies a merchant's delivery record, Samat said, "Unfortunately we can't talk about the specific methods we use to validate shipping information provided by merchants."
Here's a link to Google's October announcement of its Trusted Stores initiative.
Chrysler stops taking wholesale orders for new Fiat 500 Abarth - detroitnews.com
Just over a month after the first models arrived in U.S. showrooms, Chrysler Group LLC has informed dealers that it is no longer accepting wholesale orders for the new 2012 Fiat 500 Abarth, according to company sources.
The high-performance version of Fiat's diminutive subcompact has been selling as fast as, well, an Abarth. And while customers can still find a few in dealer inventories around the country, those who place orders now will be put on a waiting list for the 2013 model, which is expected to ship this fall.
"I put my deposit down back in March and I found out today that I'm being bumped to the 2013 build batch and now have to wait until mid-September," wrote one disappointed customer on an enthusiast website.
The track-tuned Abarth went on sale in late April. By then, the company already had cash deposits from more than a thousand customers — about as many as it had originally planned to build this year. Fiat-Chrysler upped production to about 3,000 units, but sources said that is all the company's factory in Toluca, Mexico could handle.
Demand for the pocket rocket has been spurred by rave reviews in a number of leading automotive publications.
Most Americans had never heard the name "Abarth" before the automaker aired a steamy ad for the hot hatch during the Super Bowl featuring Romanian supermodel Catrinel Menghia.
Fiat sales were up a whopping 432 percent in the United States last month, according to Chrysler.
"Dealer orders for the Abarth, the ultimate high-performance small car, exceeded the production run of this model for the 2012 model year," the company said in a statement.
(313) 222-2443
Jonathan Falik Joins BGC Partners'/Newmark Grubb Knight Frank's Capital Markets Team - Hotel Interactive Network
BGC Partners, Inc. ("BGC Partners" or "BGC"), a leading global brokerage company servicing the wholesale financial and property markets, today announced the appointment of Jonathan Falik as Senior Managing Director and Head of Hospitality Capital Markets for BGC Real Estate Capital Markets. Mr. Falik, who brings more than 18 years of hospitality investment banking and capital markets expertise, has been directly involved in transactions aggregating in excess of $25 billion, representing over 2,000 hotels. His appointment strengthens BGC/Newmark Grubb Knight Frank's growing roster of leading capital markets real estate professionals and further strengthens of its hospitality industry focus.
"I'm delighted to welcome Jonathan to our growing BGC Real Estate Capital Markets team," said Michael Lehrman, Global Head of Real Estate at BGC. "Jonathan has enjoyed a distinguished career in hospitality investment banking and capital markets, thanks to his deep understanding of the industry, his strong relationships with investors, operators, lenders and developers, and his premier skills and expertise in capital raising and advisory services, all of which we expect to capitalize on for the benefit of our clients and platform."
He continued: "We are committed to creating a fully integrated hospitality platform for the real estate industry. The continued expansion of our hospitality capital markets capabilities is a natural complement to the leasing, management, investment sales and other services already offered by Newmark Grubb Knight Frank."
"I am delighted to join Michael and the BGC/Newmark Grubb Knight Frank team and to leverage my vast hospitality industry experience as an agent, advisor, principal, owner, borrower, guarantor, franchisee, lender and asset manager to create and deliver value added solutions and superior transaction execution for our hospitality industry clients."
Mr. Falik's hospitality capital markets and advisory expertise offers additional depth and breadth to BGC/Newmark Grubb Knight Frank's growing suite of services within its real estate platform.
Prior to joining BGC, Mr. Falik served as Head of Cantor Fitzgerald's Lodging investment banking group where he was responsible for overseeing equity, debt, and advisory transactions for hospitality industry clients. Previously, Mr. Falik was the Founder and CEO of JF Capital Advisors, a boutique capital structure and M&A advisory firm and was the CEO of Eagle Hospitality Properties Trust, a 13 hotel private REIT. Formerly, Mr. Falik was a senior officer in the Real Estate and Lodging Investment Banking group of Bear, Stearns & Co. Inc. Mr. Falik will be based in New York and will report directly to Michael Lehrman, Global Head of Real Estate at BGC.
Mr. Falik received an MBA from Columbia Business School and a BA in Economics from Rutgers College.
About BGC Partners
BGC Partners, Inc., a leading global brokerage company primarily servicing the wholesale financial and property markets, has over 7,000 employees in New York, London and dozens of cities around the world, and conducts over $200 trillion in financial transactions for customers annually. BGC offers customers over 220 products, including commercial real estate, fixed income securities, interest rate swaps, foreign exchange, equities, equity derivatives, credit derivatives, commodities, futures, and structured products.
BGC's technology helps customers determine the value of a transaction and execute transactions at the best possible price. BGC's customers include many of the world's largest banks, hedge funds, governments and investment firms. Trades are executed through BGC's brokers, or through its hybrid and fully electronic brokerage services.
BGC, named after fixed income trading innovator B. Gerald Cantor, also offers financial technology solutions, market data, and analytics through its eSpeed, BGC Trader, and BGC Market Data brands, and provides clearing, processing, and other support services. For more information, please visit www.bgcpartners.com.
About Newmark Grubb Knight Frank
A part of BGC Partners, Inc., Newmark Grubb Knight Frank is one of the largest commercial real estate service firms in the U.S. It brings together the strategic consultative approach to creating value for clients and leading position in the New York market that are hallmarks of Newmark Knight Frank; the complementary strengths of Grubb & Ellis in leasing and management, investment sales, valuation and capital markets services; and BGC's financial strength, proprietary technology, expertise in global capital markets and deep relationships with many of the world's leading financial institutions.
Newmark Grubb Knight Frank and its London-based partner Knight Frank together operate from more than 300 offices in established and emerging property markets on five continents. This major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide.
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