DOHA: Fitch Ratings has affirmed Qatar Gas Transport Company’s (Nakilat) bonds at ‘A+’/’A-’ with stable outlook. The rating affirmations reflect the project’s stable operating and financial performance, the ratings agency noted.
The rated senior and subordinate bonds are part of a wider debt programme also comprising $4.3bn commercial bank facilities which originally carried bullet maturities in 2019 and 2025 and $1.2bn loans from export agencies maturing in 2020 and 2021.
Nakilat recently completed the refinancing of $917m commercial bank facilities due in 2019 through the issuance of bank debt for an equal amount maturing in 2025. Fitch considers the concentration of the refinancing risk on a single year as a weakening of the debt structure, but does not materially impair the project’s ability to raise the required debt.
The ratings agency which put the Revenue Risk under the “stronger” category noted the debt is repaid through availability-based charter payments subject to deductions for off-hire periods. The charterers are four Qatari upstream liquefied natural gas (LNG) producers (Rasgas and Qatargas 2, 3 and 4).
The four projects are regarded as displaying robust economics thanks to their low cost base, high financial flexibility and the strong global demand for LNG. All four LNG upstream projects have been established by the Qatari government through state-owned Qatar Petroleum, which also controls Nakilat.
Fitch views Qatar as a long-term, reliable and low-cost producer of LNG globally, which has invested heavily in LNG production and transportation in recent years. The ratings could be downgraded if Nakilat was to experience a significant increase in non-pass-through operating costs.
Further, a substantial deterioration of the credit quality of the charterers - Rasgas is currently rated ‘A+’/ Stable by Fitch - as a result of a protracted and material downturn in the LNG market would likely result in a rating downgrade. The Stable Outlook indicates that Fitch currently does not consider such risks to be a concern. The Peninsula
