Taqa taking majority stake in Dutch gas depository

Abu Dhabi National Energy Company, or Taqa, is to become the majority holder in a project to create a major natural gas storage facility and trading hub in the Netherlands by buying out two of its partners. The government-owned company said the deal with the Dutch company Dyas and a unit of Canada's Suncor Energy would boost its holding in the Bergermeer gas project to 60 per cent from 36 per cent.

Taqa declined to disclose financial terms of the transaction, which is subject to approval from the Dutch government. "We are proud to lead the development of this key European infrastructure project," Abdulla al Nuaimi, the company's chief executive, said yesterday. "As a long-term investor, increasing our stake in the flagship Bergermeer project reflects our confidence in and commitment to gas storage in the Netherlands."

The company said the project was proceeding on schedule. On completion in 2013, Bergermeer would be Europe's third-largest common-access gas storage facility, with an initial working volume of 4.1 billion cubic metres, Taqa said. The facility would "significantly enhance the security of energy supply to Dutch and European consumers" and contribute to gas-market liquidity. "Consequently, the project is an essential component of the Dutch government's ambition to realise the gas roundabout of north-west Europe in the Netherlands," Taqa said.

The Dutch state-owned oil and gas company EBNholds a 40 per cent interest in the Bergermeer project. Taqa and EBN plan to spend ?800 million (Dh3.72 billion) on designing and building the facility. Russia's Gazprom is also involved. It has agreed to provide "cushion gas", which remains permanently in storage to maintain pressure, in return for an undisclosed amount of commercial storage capacity at Bergermeer and a stake in the finished project.

The project's progress has not been free of problems. Some local residents fear that re-injecting gas into the depleted Bergermeer gasfield for storage might trigger earth tremors. A study by the Massachusetts Institute of Technology has confirmed the possibility. Taqa said the local community's concerns had been addressed and that independent research found gas storage did not increase the risk of earth tremors.

Last September, Reuters said Dyas and Suncor wanted to withdraw from the project over a disagreement with Taqa. Dyas denied the partners were at odds. In November, they signed a final investment agreement, even though costs had escalated from an earlier estimate of ?600m. Officials of Dyas and Suncor were not immediately available yesterday for comment. Taqa said the Reuters report was "based on speculation".

Suncor, one of Canada's biggest oil sands companies, is selling non-core assets after merging with its former rival Petro-Canada. This year it sold a package of Canadian gas assets to Taqa. The company inherited its 12 per cent Bergermeer stake from Petro-Canada. [e-mail]