TEXT-Fitch:Long-term credit trends will remain strong for U.S. pipelines
Low debt leverage and a reasonable regulatory environment
support the U.S. pipeline industry’s stable credit metrics.
Fitch believes the industry is actively reacting to shifting
supply/demand dynamics and other major long-term trends.Fitch also notes that environmental and safety costs
resulting from new federal legislation and tighter regulation
are manageable, although the extent and details of new
regulations remains uncertain. The permitting and construction
of pipelines will face growing challenges.The rapid increase of natural gas production from shale
basins will change supply dynamics and elevate pipeline
recontracting risk. In particular, Marcellus Shale production
will displace supplies from other basins and affect pipeline
capacity utilization on systems now serving the Northeast and
Mid-Atlantic regions. Several factors including increasing
demand could limit potential financial exposure. Fitch believes
it is premature to determine winners and losers.The full report ‘Natural Gas Pipelines: Hot Topics -
Long-Term Trends Affecting Pipeline Risk’ is available at
‘www.fitchratings.com.’ Fitch maintains ratings on 15 issuers in
the pipelines industry.
