Moody's Ratings has assigned long-term issuer ratings to Southern Gas Corridor CJSC (SGC), the state-owned company involved in the production of natural gas and gas condensate in Azerbaijan, as well as the sale and transportation of gas to regional and European markets.

SGC received long-term issuer ratings of Baa3 in both local and foreign currency, alongside a baseline credit assessment (BCA) of baa3, The Caspian Post reports, citing local media.

The outlook on the ratings was assessed as positive.

Moody’s said the Baa3 rating and positive outlook are in line with Azerbaijan’s sovereign rating and reflect the company’s strategic role in advancing state interests in major gas projects. The agency also highlighted the company’s direct and indirect state ownership, as well as a strong record of state backing, including guarantees.

At present, 49% of SGC shares are directly owned by the Azerbaijani state, while the remaining 51% belongs to SOCAR, the country’s fully state-owned national oil and gas company.

Although the government plans to sell a minority stake in SGC to XRG, the international investment arm of the Abu Dhabi National Oil Company, by the end of 2026, Moody’s said it expects the state to maintain control and strategic influence over the company’s activities and policies.

The agency therefore classifies SGC as a government-related issuer under its methodology. Moody’s said the assessment takes into account the company’s Baa3 standalone credit profile, Azerbaijan’s Baa3 foreign currency sovereign rating, the close correlation of default risk between the company and the state, and the high likelihood of extraordinary government support in case of financial difficulties.

Moody’s also expects SGC to maintain stable financial and profitability indicators, supported by the increasing contribution of its midstream gas transportation business. The agency added that elevated oil and gas prices are expected to further strengthen the company’s upstream exploration and production operations in 2026.

The report further noted that long-term risks associated with declining production at the Shah Deniz field are being partly mitigated through an ongoing investment program aimed at sustaining output from 2029 onward. Additional gas volumes from other Azerbaijani fields could also help preserve pipeline utilisation over the long term.