Connection fees are less important than they appear. For ENN, they were only 12% of sales in 2017, according to FactSet. What’s worrying is the overall policy signal. China now has plenty of customers for natural gas: Penetration rates are around 50% according to Jefferies. What China doesn’t have is enough gas to go around. Demand growth surged 15% last year. Domestic output growth was just 8%, leading to huge losses for state energy firms on pricey imported gas. Beijing knows rectifying this problem means raising prices for wholesale gas, which would allow drillers and pipeline builders to generate higher profits and spur investment. But it doesn’t want those higher prices passed on to Chinese households . An LNG tanker docks at an ENN terminal in Zhoushan, China. Photo: china stringer network/Reuters The logical consequence is a squeeze on gas-utility margins. The crunch has already been visible. Gas distributor […]