Abu Dhabi National Energy Company, known as Taqa, said its huge gas storage project at Bergermeer in the Netherlands, had reached a milestone and would start filling tanks with customers’ gas on Wednesday.
The project is a key plank for Taqa – which reports annual results on Wednesday – in its strategy to focus more on steady cash-earning projects and move away from riskier upstream investments, where it lost heavily in recent years.
“Gas Storage Bergermeer is the largest project ever undertaken in our history,” said Edward LaFehr, Taqa’s chief operating officer. “As a midstream asset, it is core to our strategy to increase shareholder value by shifting our portfolio towards a better risk-return balance, familiar to us from our power and water assets.”
The total project investment was about €850 million (Dh3.35 billion). Taqa holds a 60 per cent stake in Gas Storage Bergermeer and is the operator. It will also act as the marketing agent for all storage capacity that is available for third parties.
EBN, a Netherlands state-owned company, which operates independently, holds a 40 per cent stake.
Located near the city of Alkmaar, Gas Storage Bergermeer consists of the depleted Bergermeer gas reservoir, an asset acquired when Taqa bought the Dutch assets of BP in 2007. As well as storage, there is a gas treatment facility and the connecting pipeline network.
Work on the project started in 2007 and Taqa had to overcome strong objections from local residents and politicians, particularly over worries that it might cause man-made earth tremors, which had occurred four times during its gas-producing years.
But the project won backing from influential Dutch officials as it is of strategic importance to the country in its own energy plans.
The facility is Europe’s largest open access gas storage and nearly doubles the Netherlands’ gas storage capacity. That helps the country realise its objective to be north-west Europe’s most important natural gas hub – the government’s so-called “gas hub” strategy, which includes construction of a vast web of connective pipelines to take advantage of the European Union’s liberalising gas market.
Taqa said that the facility, which has storage capacity of 4.1 billion cubic metres, equivalent to the average annual gas consumption of 2.5 million Dutch households, is fully contracted for the 2015-16 storage season, which runs from the start of this month to the end of next March.
Taqa will auction capacity for the 2016 storage season in September.
The facility’s launch customers include EDF, Gazprom, Statoil and Vattenfall.
“The successful launch of Bergermeer is a demonstration of our renewed and strengthened focus on efficiency and operational excellence,” said Saeed Al Hajeri, Taqa’s chairman. “It will improve the security of energy supplies for the European people for decades to come.”
Taqa is keen to highlight the progress at Bergermeer as it deals with problems elsewhere, particularly its exposure to the oil price slump.
The company has improved its operational performance under Mr LaFehr, who took over from the former chief executive Carl Sheldon in April last year, with oil and gas production hitting a record of nearly 160,000 barrels of oil equivalent per day in the third quarter.
But Taqa reported revenues in the three months to the end of September down by about 6 per cent from the year earlier at just under Dh7 billion, with attributable profit down 27 per cent at Dh107 million, as lower oil prices began to hit the bottom line.
Oil prices have since fallen by another 45 per cent and investors are bracing for the company’s fourth quarter results.
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