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RasGas - consistent operating reliability

Global Arab Network - - George Haddad

Monday, 29 June 2009 21:35

Fitch Ratings has today affirmed Ras Laffan Liquefied Natural Gas Company Limited (II)'s (RasGas (II)) Series A bond and RasGas (3)'s Series B, C and D bonds at 'A+' with Stable Outlook respectively.
The obligations of each issuer are guaranteed by the other entity.

The ratings reflect the consistent operating reliability of the project in line with Fitch's original expectations, a committed sponsor group, access to abundant gas resources and a relatively low capital and operating cost structure which contribute to strong debt service coverage ratios and a low commodity price breakeven.

The Stable Outlook is supported by a geographically diverse portfolio of long-term offtake agreements, full chain integration with long-term shipping capacity and investments in regasification terminals by sponsors' affiliates. Additionally, Qatar is strategically located for deliveries to all major gas consuming regions, meeting seasonal swing demands.

The key constraints to the ratings are the single site nature of the facilities and the technical complexity of operating the largest liquefaction trains currently in existence.

RasGas (II) and RasGas (3) are owned, either directly or indirectly, approximately 70:30 by Qatar Petroleum and ExxonMobil affiliate (EM, rated 'AAA'/'F1+'/Stable).

RasGas extracts gas under a long-term development and fiscal agreement, produces liquefied natural gas, condensate and by-products through offshore and onshore facilities.

RasGas II currently operates three 4.7 mtpa LNG trains at the Ras Laffan Industrial City in Qatar. RasGas 3, the expansion of RasGas II, involves the construction of two larger LNG trains of 7.8 mtpa each.

Originally scheduled for completion in 2008 and 2009 respectively, initial LNG production operations from Train 6 and 7 are planned for third quarter 2009 and fourth quarter 2009. The total cost for the project is expected to be in the region of $14.6bn.

Global Arab Network

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