S&P Affirms Ras Laffan `BBB+' Rating.

Business Editors

NEW YORK--(BUSINESS WIRE)--Standard & Poor's

April 4, 2000--Standard & Poor's today affirmed its triple-'B'-plus rating on Ras Laffan Liquefied Natural Gas Co. Ltd.'s bonds. The outlook is stable.

The affirmation follows this weekend's announcement that liquefied natural gas (LNG) production began from the project's second train. The contractor has achieved 100% completion under its engineering, procurement, and construction contract, which began 36 months ago. Both trains are now operational.

Ras Laffan is a two-train LNG plant in Qatar, with a potential capacity of 6.4 million metric tons per year (mmta). Qatar General Petroleum Corp. (QGPC), at 66.5%, and Mobil QM Gas Inc., a wholly owned subsidiary of ExxonMobil Corp., at 26.5%, are the primary sponsors.

The rating on the bonds incorporates the following risks:

-- Ras Laffan's strategic importance to ExxonMobil Corp.
(triple-'A'/stable/'A-1'-plus ) and access to the North Field's abundant 380
trillion cu. ft. of low-cost natural gas reserves that underscore its long-term
commitment to Qatar.

-- Ras Laffan's recent signing of a 7.5-mmta sale and purchase agreement with
Petronet LNG Ltd. of India and a 2.6-mmta heads of agreement with Dakshin
Bharat Energy Consortium;

-- A several, but not joint, sponsor guarantee could be triggered as early as
March 2002, if the project has not reached commercial acceptance; the project
has not passed an acceptance test; the Korean infrastructure is not ready; LNG
tankers are not ready; and if financial forecasts do not show a minimum debt
service coverage ratio of 1.5x and a loan life coverage ratio of 1.9x. A test
failure will obligate sponsors to buy down debt to levels required to meet
guaranteed debt service coverage levels.

-- Korean LNG demand growth is returning after its 1998 contraction, though
demand is lower than in 1996;

-- Mobil Corp.'s $200 million contingent price support prevents a debt service
shortfall in a low oil price scenario-break-even Brent crude price is about
$10.15;

-- Seven years of production history from Qatar's North Field confirm the
deliverability of the world's largest nonassociated gas field;

-- The use of commercially proven production technology, provided by an
international consortium, including McDermott-ETPM, MW Kellogg, Saipem, JGC,
and Chiyoda.

-- A 25-year take-or-pay sale and purchase agreement with Kogas for 4.8 mmta at
a price closely tied to the Japanese Customs Cleared price, with limitations in
downward volume adjustments; and

-- An offshore New York trustee that will receive all revenues from Kogas and
others in U.S. dollars, and will pay all expenses, debt service, and equity
distributions.

However, the following strengths offset the risks:

-- Ras Laffan's strategic importance to ExxonMobil Corp.
(triple-'A'/stable/'A-1'-plus ) and access to the North Field's abundant 380
trillion cu. ft. of low-cost natural gas reserves that underscore its long-term
commitment to Qatar.

-- Ras Laffan's recent signing of a 7.5-mmta sale and purchase agreement with
Petronet LNG Ltd. of India and a 2.6-mmta heads of agreement with Dakshin
Bharat Energy Consortium;

-- A several, but not joint, sponsor guarantee could be triggered as early as
March 2002, if the project has not reached commercial acceptance; the project
has not passed an acceptance test; the Korean infrastructure is not ready; LNG
tankers are not ready; and if financial forecasts do not show a minimum debt
service coverage ratio of 1.5x and a loan life coverage ratio of 1.9x. A test
failure will obligate sponsors to buy down debt to levels required to meet
guaranteed debt service coverage levels.

-- Korean LNG demand growth is returning after its 1998 contraction, though
demand is lower than in 1996;

-- Mobil Corp.'s $200 million contingent price support prevents a debt service
shortfall in a low oil price scenario-break-even Brent crude price is about
$10.15;

-- Seven years of production history from Qatar's North Field confirm the
deliverability of the world's largest nonassociated gas field;

-- The use of commercially proven production technology, provided by an
international consortium, including McDermott-ETPM, MW Kellogg, Saipem, JGC,
and Chiyoda.

-- A 25-year take-or-pay sale and purchase agreement with Kogas for 4.8 mmta at
a price closely tied to the Japanese Customs Cleared price, with limitations in
downward volume adjustments; and

-- An offshore New York trustee that will receive all revenues from Kogas and
others in U.S. dollars, and will pay all expenses, debt service, and equity
distributions.

Ras Laffan has used the proceeds of its Rule 144A bond offering and other facilities to construct a $3.3 billion two-train LNG plant in Qatar. Primary project sponsors are Qatar General Petroleum Corp. (QGPC: foreign currency rating triple-'B'/Stable/--) at 66.5% and Mobil QM Gas Inc., a wholly owned subsidiary of ExxonMobil Corp. at 26.5%. Kogas, which is 50.2% owned by the Republic of Korea has entered into a 25-year sale and purchase agreement with Ras Laffan.

OUTLOOK: STABLE

The Ras Laffan project benefits from a highly experienced and committed sponsor in Mobil; an extraordinary completion guarantee; a $200 million Mobil contingent price support; and a solid, expanding world LNG market. The triple-'B'-plus rating is a notch higher than the state of Qatar and QGPC's triple-'B' foreign currency ratings. The rating balances modest structural credit enhancements, including ExxonMobil Corp. and Qatar guarantees, and an offshore trust, with regional event risks closely intertwined with the Qatar and QGPC credit risks. An extended low oil price environment, reduced Korean energy demands, or reduced sponsor commitment could result in a downgrade, Standard & Poor's said.--CreditWire