Azernews.Az

The credit profile of Romanian natural gas transmission operator (TSO) S.N.T.G.N. Transgaz S.A could weaken owing to the company's involvement in Nabucco project, Standard & Poor's Ratings Services said in its statement.

Transgaz is one of the six shareholders in Nabucco gas pipeline project, which is designed to transport gas from the Caspian region and Middle East to the European countries. The gas to be produced during the second stage of Azerbaijani Shah Deniz gas condensate field development is considered as the main source for Nabucco.

The other project's partners include the Austrian OMV, Hungarian MOL, Bulgarian Bulgargaz, Turkish Botas and the German RWE. Each of participants has equal share to the amount of 16.67 percent.

The estimated cost of the project is 7.9 billion euro. The shareholders will invest 30 percent of total cost of the project, the rest 70 percent will be paid owing to loans.

"If the project goes ahead, it could substantially impair Transgaz' financial risk profile in the absence of tangible state support," S&P said.

"This will, however, depend on Transgaz' commitment, and the size and type of its potential financing for the project, S&P report says.

Standard & Poor's Ratings Services today said it lowered its local currency long-term corporate credit rating on Transgaz to 'BB+' from 'BBB-', following a similar action on the local currency long-term sovereign credit rating on Romania (foreign currency BB+/Stable/B; local currency BB+/Stable/B). The 'BB+' foreign currency rating was affirmed. The outlook is stable.

S&P says it is unlikely to raise their ratings on Transgaz above those on Romania, since the company derives the majority of its earnings from its domestic market.

At the same time, S&P revised their assessment of Transgaz' stand-alone credit profile (SACP) to 'bb+' from 'bbb-' previously.

The revised SACP reflects S&P's view of Transgaz' high exposure to country risk in Romania, because of its monopoly status and concentration of revenues in Romania, and strategic importance within the energy sector.