Price factors determine the outlook

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1. An important aspect of the oil and gas reform is reducing costs for end-users. Given the current oversupply of natural gas in the international market, U.S. LNG trade serves as a good example: for U.S. LNG to be competitive when exported to China, it needs to have a lower price compared to LNG from Australia and the Middle East. In short, to increase domestic natural gas consumption, it is necessary to lower natural gas prices. 2. The recent restructuring of coal-fired power enterprises is also aimed at eliminating as many intermediate steps in the coal distribution process as possible, in order to prevent coal prices from falling too low and thus help these coal enterprises survive. 3. Will the policy promoting the use of ethanol-blended gasoline boost the vitality of coal-based methanol companies? It remains to be seen whether coal-based methanol companies will drive up coal prices if it truly does promote such growth. 4. Natural gas prices are expected to fall, while coal prices are expected to rise. How can coal-to-natural gas companies cope with these opposite trends? Coal-to-natural gas projects can’t be used solely for winter peak shaving!