Dana Gas completes acquisition of Bahraini affiliate
Posted: 02 July 2007
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Dana Gas said it has completed the acquisition of its Bahraini affiliate, Danagaz Bahrain . The company will be owned 66% by Dana Gas and 34% by Bahraini partners. Its first investment will lead the consortium to build, own and operate the Gulf of Suez Gas Liquids Plant in Egypt .
The share purchase agreement was signed by HE Shaikh Hamad bin Ebrahim Al Khalifa and by Hamid Dhiya Jafar, Executive Chairman of Dana Gas.
The Gulf of Suez Gas Liquids Plant project involves the engineering, fabrication, installation and operation of a high-efficiency gas liquids extraction and manufacturing plant near Ras Shukheir, on the western shore of the Gulf of Suez , Egypt .
The plant will be capable of processing approximately 55 billion cubic feet per year of natural gas and will produce approximately 120,000 metric tonnes per year of propane and butane in liquid form.
The project will be executed by a joint venture company, Egyptian Bahraini Gas Derivative Company (EBGDCO), which will be owned 40% by Danagaz Bahrain , 40% by state owned Egyptian Natural Gas Holding Company (EGAS), and 20% by the Arab Petroleum Investment Corporation (APICORP). The company will also undertake the export marketing of liquid products from the plant.
“We are very pleased to be cementing this agreement with our esteemed partners in Bahrain , which further extends Dana Gas’s reach into the region and enhances our role as a truly regional natural gas company,” said Rashid Saif Al-Jarwan, General Manager of Dana Gas.
“In addition, the Gulf of Suez Gas Plant Project, inshallah the first of many joint projects, further strengthens our strategic position in Egypt , and also enhances our regional capabilities in the region’s important gas processing sector, where we already have several gas processing plants, including in Egypt , the UAE and another two being established in Northern Iraq .”
The agreements for completion of the project have already been finalized and signed, including a long-term contract for supply of natural gas from the Egyptian General Petroleum Corporation (EGPC), as well as the Land Agreement and Sea Berth Agreement for export of the products.
The Joint Venture Company (EBGDCO) is being incorporated as a “Free Zone” company under the Egyptian law on Investment Guarantees and Incentives. Implementation of the project will commence soon and is expected to take 18 months to completion. Civil engineering and installation construction will be done by local contractors. The plant will use proven state-of-the art technology that has been applied in many similar applications worldwide.
The plant is slated to operate at highly efficient recovery rates, recovering 99% of the propane in the gas stream and 100% of the butane. Due to the nature of the gas supply, the project will manufacture approximately 110,000 tonnes per year of exportable international specification propane, which represents about 90 percent of the total gas liquid product from the plant.
Egypt is a net exporter of propane, and is a net importer of butane for domestic consumption. The propane from this project will be exported by ship to European markets such as France , Spain , Italy and Turkey , which import significant quantities of propane to meet national needs. Potentially higher margin Indian Ocean region markets are a future possibility. Propane is used for industrial fuel, space heating, automobile fuel and petrochemical feedstock. The butane produced, approximately 10,000 metric tonnes per year, will be sold on long-term contracts at the plant boundary to the Egyptian General Petroleum Company (EGPC) to help meet Egypt domestic requirements.
Dana Gas is already the sixth largest producer of natural gas in Egypt , a country which has doubled its proven natural gas reserves in the last five years to 70 trillion cubic feet. The Company is aggressively pursuing active exploration drilling programmes in Egypt this year, and recently announced further new gas discoveries. |
