Following the explosion and fire at its gas-to-liquids plant this week, CariCRIS (Caribbean Information & Credit Rating Services Limited), the region’s credit rating agency, has adjusted the credit rating for NiQuan Energy Trinidad Limited to Rating Watch – Developing status.
According to an official statement CariCRIS, this week’s incident “may pose a further delay in the Company ramping up to full scale commercial production”, which will have implications for its ability to service its debt.
The full text of the CariCRIS statement follows…
NiQuan placed on Rating Watch – Developing
Caribbean Information & Credit Rating Services Limited (CariCRIS), the region’s credit rating agency, has today placed NiQuan Energy Trinidad Limited (NETL or the Company) on Rating Watch – Developing.
This Rating Action was taken following an incident at its Gas to Liquids plant at approximately 6:35 A.M. on April 7th, 2021.
The Company indicated that the plant suffered a serious equipment failure during the start-up of the hydrocracker system that resulted in the blow out of its DA-301 system, a part of the product cleaning process, and caused a fire. The plant was immediately shut down and the fire was subsequently extinguished. Thankfully, the Company reported that there were no casualties. The Company’s personnel are currently working on determining the root cause of the equipment failure and the required safeguards to prevent recurrence going forward.
CariCRIS will liaise closely with the Company’s personnel over the coming days to determine the impact of this event on the Company’s credit rating. While we are pleased with progress made to date in getting the plant to produce GTL product, we are concerned that this incident may pose a further delay in the Company ramping up to full scale commercial production. This, in turn, could adversely impact the Company’s ability to effectively conclude the refinancing of its existing US $120 million debt facility.
A CariCRIS rating is placed on Rating Watch – Developing when events occur that may affect the credit quality of the issuer/issue, the impact of which cannot be accurately assessed at that point in time. A rating placed under Rating Watch does not imply that the rating will necessarily change.
We will be monitoring developments closely over the coming weeks and will adjust our assigned ratings accordingly