The ratings on Gas Natural SDG S.A. are based on the Spanish utility's low-risk regulated domestic gas distribution activities, which are complemented by a leading competitive position in gas supply, good operational flexibility, a solid capital structure, and a degree of financial flexibility through the remaining stake in Enagas S.A. (AA-/Stable/A-1+). These strengths are offset by management's growth-oriented strategy and financial policy, as well as by the group's nonregulated activities, material presence in Latin America, and dependence on gas supply from Algeria. Gas Natural aims to become an integrated international natural-gas and liquefied-natural-gas (LNG) operator. It plans to invest a significant €12.5 billion over 2008-2012, 55% in regulated gas distribution and 45% in upstream and midstream operations and electricity generation.
