BAKU, Azerbaijan, Jan. 27
By Nargiz Sadikhova – Trend:
Fitch Ratings has assigned Kazakhstan’s Beineu-Shymkent Gas Pipeline LLP (BSGP) a long-term issuer default rating (IDR) of 'BBB-' and national long-term rating of 'AA+(kaz)' with a stable outlook, Trend reports with reference to the Fitch.
“The tariff for the next regulatory period of 2020-2024 was approved at the end of 2019. The tariff can be adjusted down once per year if actual transported volumes are above the plan and/or costs are lower than expected. Upward revision is unlikely and only possible in limited cases. Factors such as tenge devaluation, reduction in gas transportation volumes and increased costs cannot reasonably initiate tariff revision before the next regulatory period,” the report said.
As Fitch expected, the tariff for the new regulatory period of 2020-2024 is based on conservative projections of gas transportation volumes.
“If volumes are higher than expected, tariffs will be adjusted downward. This approach will provide the company with flexibility and a buffer in case of low volumes,” the report said.
According to Fitch, the shareholder loan from KazTransGas (KTG) will continue to expose the project to foreign exchange risk as its principal and interest are linked to the US dollar exchange rate.
Developments that may, individually or collectively, lead to positive rating action: BSGP's rating is linked to its parent and key counterparty KTG and will mirror any rating action on KTG's rating provided that the links remain strong.
Developments that may, individually or collectively, lead to negative rating action: Negative rating action on KTG or Sustained deterioration of BSGP's SCP combined with weaker ties between BSGP and KTG.
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