Standard & Poor’s Ratings Services has affirmed its ‘A-‘ long-term senior unsecured debt rating on liquefied natural gas (LNG) project Oman LNG LLC’s (OLNG) US$1.3bn commercial bank facility following a review. The outlook is stable.

At the same time, Standard & Poor’s affirmed its ‘BBB+’ long-term underlying debt rating on QGPC Finance (Cayman) Ltd’s (QGPC Finance) US$400mn senior secured export receivable-backed notes. The outlook is stable. The ‘AAA’ ratings on US$200mn of the notes, insured by Ambac Assurance UK Ltd (AAA/Stable/–), and the ‘AAA’ ratings on the other $200 million notes, insured by MBIA Insurance Corp. (AAA/Stable/–), were also affirmed.

“The rating actions follow a review of both projects’ operations, insurance agreements, and the regional event and political risks as the threat of war in

  • Iraq looms,” says Standard & Poor’s credit analyst Rachel Goult. “Standard & Poor’s does not believe that the credit quality of either project has deteriorated as a result of increased political tensions in the region.”


OLNG is a two-train LNG plant in the Sultanate of Oman (local currency BBB+/Stable/A-2; foreign currency BBB/Stable/A-3) that has been operational since April 2000. The affirmation of the rating on OLNG reflects the company’s strong operational and financial results for 2002, and its demonstrated ability to mitigate Indian Dhabol Power Co’s incapacity to take contracted volumes. Furthermore, the renewed insurance program remains adequate and long-term sale contracts with Korea and Japan mitigate more than two-thirds of market volume risk.

The ratings are expected to remain stable, based on robust project economic fundamentals and the credit enhancements that resulted in a rating that is two notches higher than the Omani foreign currency sovereign rating.

Payment on QGPC Finance notes (due 2010) is supported by export receivables from the sale of natural gas liquids (NGLs) produced by state-owned oil company Qatar Petroleum’s (QP; foreign currency A-/Positive/–) new NGL-4 project.

The affirmation of the ratings on QGPC reflects the near completion of its NGL-4 project after almost one year of construction delays. The project, which includes the upgrading and integration of existing facilities with the new facilities, is now in the final stages of start-up. Noteholders continue to benefit from full recourse to QP if QGPC Finance fails to sell enough product to cover its debt service obligations.

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