Fitch affirms Petronet LNG AA (ind) ratings
Fitch affirms Petronet LNG AA (ind) ratings
Fitch Ratings affirmed the national long-term issuer rating of `AA (ind)` and the national short-term issuer rating of `F1+(ind)` assigned to Petronet LNG (PLL) on September 5. The outlook is stable.
>PLL`s ratings derive strength from its assured-quantity supply contract with Qatar`s Ras Gas and its back-to-back sales agreements with key customers Indian Oil Corp. (IOC), Bharat Petroleum Corp. (BPCL) and GAIL India (GAIL) for the existing operations. As liquefied natural gas (LNG) prices are pass-through, PLL remains protected from commodity price fluctuations, which helps stabilise earnings.
Fitch also notes the financial and operational strengths of its key sponsors, which are of the highest credit quality and bring in their significant experience in the oil and gas sector. The compa ny`s margins are determined by the terms of the contract, which specify the regassification rate to be paid by the customers, another key factor supporting the ratings.
The ratings also factor in the project execution skills exhibited by PLL while commissioning the existing facility at Dahej, which was completed within cost and time estimates. Moreover, the well-structured sales and purchase agreements (SPAs) with its LNG suppliers and natural gas (NG) customers ensure stable cash flows over the contractual period. In FY07, PLL started the regassification of spot LNG cargoes, which complimented its stable cash flows from long-term cargoes.
Shares of the company gained Rs 1.55, or 2.47%, to settle at Rs 64.35. The total volume of shares traded was 4,800,340 at the BSE. (Friday)
