Abu Dhabi National Energy Company (Taqa) has found the first customers for what it hopes will be Europe's biggest gas storage site even as it awaits court approval to begin work.
Norway's Statoil and the Dutch energy trader Vattenfall have secured space in the US$1.1 billion (Dh4.04bn) Bergermeer site starting in 2015, when the facility is scheduled to begin commercial operations. A third European energy company that Taqa did not name was also among the customers, bringing the total value of the storage contracts to $500 million to $1bn, depending on the gas price. "Bergermeer is coming to market at the right time," said Carl Sheldon, the chief executive of Taqa.
But the plans hinge on the judgement of a Dutch court, where environmentalists and local community groups have lodged objections over a range of issues including Bergermeer's effects on migratory birds and a possible increase in the risk of earth tremors. Raad van State, the Dutch court, is to hold a hearing next month and could make a decision on the project as soon as six weeks later, said Sabine Heijstek-van Leussen, a spokeswoman. Drilling has been suspended since August.
"There are strict environmental procedures in the Netherlands," Allan Virtanen, a Taqa spokesman, wrote in an email. "The drilling activities related [to] the development of Bergermeer will create peak noises that may disturb breeding meadow birds within a couple of hundred of metres from the well site.
"We are generously compensating these effects with our nature compensation scheme consisting of alternative breeding areas, which has been developed in good cooperation with local environmental groups and authorities."
Work on the Bergermeer storage facility is expected to begin in the summer, since the drills that will be used to punch through to a depleted natural gas reservoir can be erected only after July, when the meadow birds leave for West Africa.
The plan to transform the empty gas reservoir into a storage site is 40 per cent backed by Energie Beheer Nederland, a state-owned Dutch oil company, and 60 per cent backed by Taqa, which is majority-owned by the government utility Abu Dhabi Water & Electricity Authority.
Shares of Taqa, 24.9 per cent of which is traded on the emirate's bourse, were slightly down yesterday at Dh1.20. The site is expected eventually to hold 4.1 billion cubic metres of gas, enough to produce about 46 terawatt hours of electricity.
The first three clients have bought about a quarter of that capacity, and their contracts range from four to 10 years.
"It will enhance liquidity and further improve the functioning of the Dutch gas market," said Stephen Asplin, the head of Vattenfall.