Taqa to buy Dutch gas company

The Abu Dhabi National Energy Company, or Taqa, has agreed to acquire a Dutch company, DSM Energy Holding.

A Taqa platform off the Dutch coast. The company's North Sea acquisition should be completed in the third quarter of this year.

The Abu Dhabi National Energy Company, or Taqa, has paid ?285 million (Dh1.48 billion) to acquire more oil and gasfields as well as pipelines in the North Sea, strengthening its evolving European gas network. Taqa began as a power and water desalination utility in Abu Dhabi, but since 2005 has invested about US$25bn (Dh91.82bn) overseas, transforming itself into an international energy company with oil, gas and power assets on four continents. The purchase of DSM Energy Holding adds to Taqa's hydrocarbons output from the Dutch North Sea, offers new exploration potential and complements its involvement in a big Dutch gas storage and trading hub. "We want to increase our role as a key European upstream player and to become a player in a large gas storage centre," said Paul van Gelder, the managing director of Taqa Energy, the Netherlands unit of Taqa. "When the investment opportunity was there, we looked at it and saw a fit." The purchase of DSM Energy from Life Sciences and Materials Sciences and Royal DSM, both based in the Netherlands, would be completed in the third quarter of this year, subject to regulatory approval, he added. It will nearly double Taqa's oil and gas production from the Dutch North Sea to 11,000 barrels of oil equivalent per day (boepd) from 6,000 boepd with the addition of output from 20 small deposits that produce mainly gas. The assets overlap with the company's existing operations off Holland's coast, and also bring exploration prospects. Since Taqa and DMS already share North Sea production platforms, Taqa is familiar with the Dutch company's producing assets, Mr van Gelder said. Taqa would also acquire a stake in a "major" gas pipeline system in the Dutch North Sea, along with other pipelines, he said. The assets would complement the company's involvement in the Bergermeer Gas Storage project in the Netherlands. The joint venture with Gazprom, the Russian gas company, is aimed at turning a depleted Dutch gasfield into Europe's largest gas storage facility. Work on Bergermeer is progressing well, Mr van Gelder said. An agreement on "cushion gas", the permanent inventory that maintains pressure in a storage facility, is expected next month. A final investment decision on the project should follow by the end of this summer. The DSM pipeline assets would put Taqa "in a better position to control the gas flows" to and from Bergermeer, Mr van Gelder said. With respect to Taqa's global game plan, the acquisition would push the company's total European oil and gas output to 55,000 boepd, advancing its plan to enlarge its European oil and gas production portfolio to balance its North American upstream assets. Those produce 90,000 boepd, mainly from gasfields in western Canada. More European output in the next few years would come from a $500m workover of the package of mature oil and gas assets in the UK North Sea that Taqa acquired last year from Royal Dutch Shell and Exxon Mobil, and from further acquisitions. Mr van Gelder said Taqa was eyeing opportunities in Norwegian waters. "We're looking at stable and low-risk sources of cash flow," he added. While Taqa has at times appeared to take a scattergun approach to building assets in North America, Asia and North Africa, the same can no longer be said of its European portfolio. Taqa's holdings in the Netherlands are central to its European strategy. The country's government sees Bergermeer as crucial to its ambitions to become an important hub for Europe's gas network, at a time when the EU is focused on strengthening its gas storage and distribution network following gas-supply disruptions last winter. tcarlisle@thenational.a