Southern Natural Gas Co. LLC

Overview Key strengths Key risks Regional demand-pull pipeline for end-use markets in Alabama, Georgia, and South Carolina. Large percentage of contracts currently coming due by 2025. Stable and predictable cash flow backed by firm transportation contracts, which account for about 90% of capacity. Single-asset natural gas pipeline. High average shipper rating of ?BBB+?. Majority of discretionary cash flow paid out via dividends. The company currently has around 55% of its top 10 shippers? contracts coming due by 2025. We believe this risk is mostly limited given that most of the capacity in these expiring contracts are with utility company Southern Co. (SO), which is a joint owner of SNG, or one of its subsidiaries. We believe SO has a strong

...Upcoming re-contracting risk is mitigated by counterparty relationships and our overall views surrounding natural gas demand in key areas that Southern Natural Gas Co. LLC (SNG) serves. The company currently has around 55% of its top 10 shippers' contracts coming due by 2025. We believe this risk is mostly limited given that most of the capacity in these expiring contracts are with utility company Southern Co. (SO), which is a joint owner of SNG, or one of its subsidiaries. We believe SO has a strong incentive to continue using SNG due to the joint...

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