International rating agency Fitch Ratings assigned a long-term issuer default rating of “BBB-” with a stable outlook to Beineu-Shymkent Gas Pipeline LLP (hereinafter “GBS”). Agency assigned a long-term rating of AA + (kaz) according to the national scale.
GBSH is a 50/50 joint venture between KazTransGas JSC and CNPC China Oil and Gas Corporation through the Trans-Asia Gas Pipeline Company Limited gas pipeline. At the same time, the Fitch Ratings rating agency believes that the Kazakhstani gas operator exercises extensive operational and financial control over the GBS.
The ratings assigned to GBS reflect Fitch’s opinion on the strong relationship between the company and its direct parent company, KazTransGas JSC, which provides great financial support through intercompany loans and guarantees.
In addition, as Fitch notes, GBS has a strong position as the only route for Kazakhstan to export gas to China and supply its own gas to the state southern regions.
The Beineu-Bozoy-Shymkent gas pipeline is one of the largest projects in the Kazakhstan gas industry, implemented by Independent Kazakhstan and has the status of “strategic national treasure”.
According to Fitch, this entails restrictions on privatization, and as a natural monopoly, the activities of GBS fall under state monitoring and control. It gives a rights to exempt from corporate income tax and property tax, until the full payment of the debt used for the construction of the pipeline.