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UAE: Dolphin Energy Limited rating reflects cost competitive gas supplier to Abu Dhabi and Dubai

- Maha Karim

Monday, 06 September 2010 14:40

UAE: Dolphin Energy Limited rating reflects cost competitive gas supplier to Abu Dhabi and Dubai

UAE (Dubai) - Fitch Ratings has today affirmed Dolphin Energy Ltd's (DEL) USD1,250m senior secured notes at 'A+' with a Stable Outlook.

The rating affirmation reflects DEL's positive operating history and strong strategic rationale, as an important and cost competitive gas supplier to Abu Dhabi and Dubai. It also reflects the project's relatively robust insulation from market risk, solid hydrocarbon reserves and the covenanted 51% ownership by Mubadala, and ultimately the Government of Abu Dhabi.

The construction of the Taweelah Fujairah pipeline, as well as the expansion of storage facilities at Ras Laffan, is progressing well, with the final stage of the pipeline due to be completed in the first quarter of 2011, and storage substantially complete.

The debt service coverage ratio (DSCR) for the twelve months to June 2010 stands at 3.52x, while the forecast six-month DSCR to December 2010 is 2.70x, both comfortably above Fitch Base Case expectations.

The rating continues to be constrained by the single site nature of the project, and the complex legal and financial structure. The ratings could be affected in the future by sustained operating difficulties and/or a deterioration in the credit quality of the relevant countries.

DEL operates a large oil and gas project involving the extraction of gas from offshore fields in the Persian Gulf, the processing and separation of the gas at facilities in Qatar, the transportation of the clean gas via pipeline to customers in the United Arab Emirates and Oman, and the sale of condensate, LPG and other by-products, generally to international customers.

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