Fitch rates Petronet LNG AA(ind)

Fitch Ratings said it assigned an AA(ind) national long-term issuer rating and an F1+(ind) national short-term issuer rating to India-based Petronet LNG Ltd.

The outlook is stable.

The agency said Petronet LNG's ratings derive strength from its assured quantity supply contract with Qatar's RasGas and its back-to-back sales agreements with key customers Indian Oil Corp., Bharat Petroleum Corp. and GAIL India Ltd. As liquid natural gas prices are passed through to the consumer, Petronet LNG remains protected from commodity price fluctuations, which helps stabilize earnings.

Conversely, the ratings are constrained by the company's aggressive capex plan to fund the more than doubling of its existing capacity from 5 million tons per year to 12.5 million tons per year. Fitch said this exposes the company to risks of time- and cost-overruns during implementation and the consequent cash flow pressures.

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