Malaysian gas exporters should benefit from rising export revenue, said Fitch Ratings. On Monday (Nov 22), the rating agency said it expects a mixed performance for its rated Asia-Pacific (APAC) gas producers and major energy and utilities (E&U) importers from recent record-high global gas prices. The agency, however, said overall credit improvement or deterioration among rated issuers should remain largely within the headroom of their respective ratings, or standalone credit profiles in the case of government-related entities (GREs). In a report titled "Spotlight: Rising Global Gas Prices for APAC Energy Companies", it said that in general, rated APAC issuers' gas contracts are still tied to long-term crude-linked contracts, with smaller exposure to spot liquefied natural gas (LNG), which has helped to moderate volatility in performance. “Net gas exporters in Australia and Malaysia should benefit from rising gas export revenue.
“By contrast, maintaining power-tariff stability remains a government priority among countries which rely on imports for power and heating purposes, which may prevent full cost pass-through among importing GREs such as those in China,” it said Furthermore, Fitch said stronger-than-expected gas consumption in China, if winter conditions are more severe, would also increase the country's exposure to spot gas. It said countries with established cost pass-through mechanisms such as South Korea and Taiwan-rated utility companies would be largely shielded under established mechanisms. However, Fitch believes government intervention may still prevent a full pass-through on a timely basis. Meanwhile, it said Australia, Indonesia and Vietnam are insulated from global gas-price volatility as they rely on domestic gas production, with minimal exposure to gas imports.