[ET Net News Agency, 31 May 2018] S&P Global Ratings affirmed its 'A' long-term issuer
credit rating on Kunlun Energy Co. Ltd (00135). The outlook is stable. At the same time,
S&P affirmed the 'A' long-term issue rating on the company's outstanding senior unsecured
notes.
S&P affirmed its rating on Kunlun Energy to reflect its view of the company's robust
cash flow generation, as supported by the commissioning of its Shaan-Jing Pipeline IV, the
stable growth of its gas sales volume, and decreased capital expenditure.
S&P expects Kunlun Energy to continue to benefit from China's strong growth for natural
gas consumption over the next two years. It estimates the company can maintain annual
growth in gas sales volume of 10%-15%, in line with other Chinese gas distributors. The
central government's initiative to reduce air pollution and promote natural gas
utilization as a replacement for coal, especially in the rural areas of the northern
region, will increase demand. In 2017, Kunlun Energy's gas sales volume grew 24% year over
year and gas pipeline transmission 17%. In the first quarter of 2018, gas sales volume
grew more than 20% year on year. (HL)