RATING DRIVERS
Supporting Factors:
- Strategically important entity to the domestic energy sector and the Government of Trinidad and Tobago
- Improvement in gas supply from continued exploration and development activity
- Continued low gearing and good debt protection metrics, though reduced from prior years
Constraining Factors:
- Highly vulnerable to a changing energy landscape characterised by volatile energy prices
- Reduced earnings and profitability due to lower energy commodity prices and gas production
Rating Sensitivity Factors
Factors that could, individually or collectively, lead to an improvement in the ratings and/or Outlook include:
- An improvement in the CariCRIS credit rating of the GoRTT
- An increase of gross margins to 25% for 2 consecutive years
- An increase in the DSCR to >3 times for 2 consecutive years leading to an improvement in the ability to service its amortised debt payments
Factors that could, individually or collectively, lead to a lowering of the ratings and/or Outlook include:
- Debt / EBITDA increases to >5 times
- A fall in the effective DSCR to <1 times for 2 consecutive years leading to a deterioration in the ability to service its amortised debt payments
- A significant decline in international prices of ammonia/ methanol, leading to a material decline in revenue
- Deterioration in the CariCRIS credit rating of the GoRTT
COMPANY BACKGROUND
NGC is a limited liability company wholly owned by the Government of the Republic of Trinidad and Tobago (GoRTT) and is designated as the government’s prime mover in the natural gas sector. Since its establishment in August 1975, NGC has played a leading and key role in the development of Trinidad and Tobago’s natural gas industry. With over 45 years’ experience, the NGC Group has a diversified portfolio of business interests, which can be placed under the following three major categories:
- Gas transportation and compression – NGC is the sole transmitter and distributor of natural gas to the natural gas-based energy industry as well as manufacturing concerns throughout the country. NGC’s role was augmented in 1982 by the collection and compression of low-pressure offshore gas from the Teak and Poui platforms.
- Merchant gas trading – Since 2004, as the sole purchaser and seller of natural gas, NGC has been purchasing natural gas from four major suppliers (British Petroleum Trinidad and Tobago (bpTT), Shell Trinidad Limited, BHP Billiton, and EOG Resources and supplying same to consumers in the heavy industrial sector as well as in the light industrial/commercial sector located at the Point Lisas Industrial Estate.
- Investment holdings – NGC has strategic equity investments in natural gas liquids (NGLs) and liquefied natural gas (LNG) companies, and subsidiary and associated companies operating in different segments of the local natural gas value chain including port and site infrastructure development, marine infrastructure management and helicopter services.
In the last decade, NGC has increased its strategic positioning within the natural gas value-chain in Trinidad and Tobago while supporting the global clean energy agenda. As part of its repositioning within the value chain, the Group has made investments in the upstream, midstream, downstream and commodity trading. Furthermore, one of NGC’s primary evolving objectives is to lead the change in the domestic industrial sector to support the Green Agenda via investments in solar energy projects and work on the production of green hydrogen.
Analytical Contacts:
Musa Abdullah
Tel: 1-868-627-8879 Ext. 233
E-mail: mabdullah@caricris.com
Anelia Oudit
Tel: 1-868-627-8879 Ext. 226
Mobile: 1-868-487-8364
E-mail: aoudit@caricris.com
Website: www.caricris.com
Disclaimer: CariCRIS has taken due care and caution in compilation of data for this product. Information has been obtained by CariCRIS from sources which it considers reliable. However, CariCRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CariCRIS’ prior written approval. CariCRIS is also not responsible for any errors in transmission and especially states that it has no financial liability whatsoever to the subscribers/ users/ transmitters/ distributors of this product.