Taqa has signed a joint venture with Russian gas company Gazprom to help develop Europe's largest gas storage project.
Taqa signs up Russia to create European gas storage facility
ABU DHABI // Abu Dhabi National Energy Company (Taqa) has signed a joint venture with Russian gas company Gazprom, which holds that country's monopoly, to help develop Europe's largest gas storage project. Taqa is the operator of the Bergermeer Gas Storage project, a depleted gas reservoir in the Netherlands which it aims to use for storage to balance flows on the European gas grid.
"The new gas storage facility will enhance the security of energy supply to Dutch and European consumers, and will contribute significantly to the liquidity of the north-west European gas markets," Taqa said in a statement. Taqa began as a power and water desalination utility in Abu Dhabi, but since 2005 has transformed itself into an international energy company, with oil, gas and power assets across three continents.
Using sovereign funds and debt, it aims to become a $60 billion business by 2012. By June this year, its assets were valued at $23.4 billion (Dh86bn). The Netherlands sees the Bergermeer project as the key to its ambitions to become a "roundabout" for Europe's gas network. Construction of the gas storage is expected to start in the second quarter of next year, with commercial operations due to begin by the second quarter of 2013.
Once it is operational, most of the storage's capacity will be made available for third-party access, a key component of the roundabout concept. Gazprom joins existing partners in the project, including Energie Beheer Nederland, Dyas and Petro-Canada. It controls 16 per cent of the world's gas reserves and holds a monopoly over Russian exports of the fuel. Gazprom has decades of experience designing and building gas storage projects, and will deliver "cushion gas" to Bergermeer in the summer months over the next four years to get the project going. Cushion gas is necessary to ensure the reservoir has the optimal pressure to start commercial storage. Russia is the largest supplier of gas to Europe.
Taqa and Gazprom aim to complete technical and contractual talks and a final investment decision on the project by the end of March. At the same time, Taqa has started talks with other potential partners and cushion gas suppliers to try to create a diverse consortium of global energy players for the Bergermeer gas storage project, the company said. "This consortium of existing and new partners will ensure the success and on-time completion of the Bergermeer gas storage in order to secure Europe's energy supplies for decades to come," the statement said.
Bergermeer is just a small part of Taqa's growing portfolio of European energy assets. It amassed more than $1billion of North Sea assets in 2006 and 2007 in purchases from Canada's Talisman Energy and BP. This year, it bought more North Sea assets from Royal Dutch Shell and Exxon Mobil for an undisclosed sum. In September, Taqa agreed to acquire stakes in oil and gas properties in the Dutch North Sea from Cirrus Energy, a Canadian oil company, as part of a plan to quadruple the value of its North Sea assets to US$20 billion (Dh67bn) by 2016.
Taqa said it would acquire 15 to 30 per cent interests from Cirrus in three exploration blocks and one offshore field, in return for funding ?15million (Dh70m) to ?30m of exploration costs. email@example.com