Standard & Poor (S&P)'s has assigned its preliminary A- rating to Qatari Ras Laffan Liquefied Natural Gas Company’s $665 million bonds due September 15, 2009, and raised its ratings on Ras Laffan's $800 million 8.29 percent bonds due March 15, 2014, and $218 million 7.63 percent bonds due September 15, 2006, to A- from BBB+.
The rating actions follow several years of strong financial performance exceeding projections and reductions in expenses. The outlook is stable, according to a press release.
Ras Laffan is a two-train liquefied natural gas (LNG) plant in the State of Qatar, with a potential capacity of about 6.6 million metric tons per year. It is one of the world's lowest-cost sources of LNG. Qatar Petroleum, at 66.5 percent and ExxonMobil RasGas, a wholly -owned subsidiary of Exxon Mobil Corp, at 26.5 percent, are the primary sponsors.
The company will use the net proceeds of the bonds to prepay $660 million of existing project debt that the project incurred at its inception. As a result, the Ras Laffan project is replacing a more expensive loan with a lower interest rate bearing debt security and is not incurring additional debt.
"Ras Laffan's excellent financial performance has consistently exceeded bond pro forma numbers over the past three years and will most likely continue to generate a strong economic profit," said S&P's credit analyst Peter Rigby.
Ras Laffan's access to Qatar's North Field, the world's largest non-associated gas field with 900 trillion cubic feet of economically recoverable natural gas reserves, protects the project from gas reserve depletion risk and provides strong growth opportunities. In addition to
Ras Laffan's exceptional financial performance, a highly experienced and committed sponsor in ExxonMobil and a solid, expanding world LNG market will prevent rating deterioration. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
