Dana Gas to Spend $500 Million on Major Projects in 2008
Dana Gas PJSC has announced investments of over US $500 million this year in the Company's projects in Northern Iraq, Egypt and the UAE.
Dana Gas posted revenues of over AED 1 billion in 2007 which was its first year of operations, and also saw the Company add to its UAE positions with major new entries into the gas upstream business in Egypt and the Kurdistan Region of Iraq, while raising US$1 billion in an international sukuk offering that had to be increased in size due to strong investor demand. The Company's announced investments for 2008, covering all sectors of the gas industry from the upstream through to the downstream, are expected to realize the value of these strategic positions and further boost revenues over the next stage of Dana Gas's development.
"This year is an important year for the Company, as we will be building upon the important milestones and solid foundations achieved last year, and making major investments that will rapidly take Dana Gas to a new level in its growth and development," said Mr. Ahmed Al-Arbeed, Dana Gas Executive Director, Upstream.
"Dana Gas has already established strong positions in all areas of the natural gas business in the UAE, Egypt and Iraq, and we will continue to build upon these as well as expand into new countries in the GCC Region and North Africa, especially in view of the record oil prices currently witnessed. Our focus this year will be implementing the important projects in the UAE and the Kurdistan Region of Iraq, while significantly expanding the drilling program of new wells in Egypt in light of the encouraging new discoveries we have already achieved," Mr. Al Arbeed added.
Dana Gas is currently implementing a major integrated gas project in Iraq's Kurdistan region on a fast-track basis in a record time of just one year, in a 50:50 joint venture partnership with Crescent Petroleum, at a combined investment of US$ 650 million. The project, which involves gas development, production, processing and pipeline construction, is the largest private sector energy project in Iraq, and is already over 80% complete.
First gas production from the project is on target for the middle of this year, building up to a production of 300 million cubic feet per day by the year-end, approximately twice the Company's current production in Egypt. Dana Gas's agreements with the Kurdistan Regional Government of Iraq were signed in April 2007, and cover a range of energy-related services and the building of substantial infrastructure to process and transport natural gas, as well as the development of the first "Dana Gas City", a unique industrial complex that will leverage external economies of scale by powering several industrial operations concentrated in the same area using natural gas. Dana Gas is proudly behind the largest private sector project in Iraq, which will provide jobs, training, infrastructure and savings on fuel imports to the region, as well as an important long-term strategic position for Dana Gas in an area with high growth potential.
In the UAE, in addition to preparing for start-up for the processing and supply of imported gas, Dana Gas has recently signed a 25-year concession agreement for exploration and development of gas in an area of over 1,000 sq km offshore Sharjah, including development of the discovered Zora Gas Field. The development plans are being finalized with the tenders for offshore oilfield services soon to be awarded for fast-track implementation to produce gas in 2009.
Another region in which Dana Gas has established itself in the past year is Egypt, where the company now produces 140 million standard cubic feet per day of gas and 6,000 barrels per day of propane, butane and condensate, making the Company the sixth largest producer of gas in the country. All products are sold in Egypt for use in the local markets and there are extensive plans to drill 19 more development and exploration wells in the country this year at an investment of US$170 million, following positive exploration results by Dana Gas including new gas discoveries and the first commercial discovery of oil in the Upper Egypt region.
Last year also saw the acquisition of DANAGAZ Bahrain, an affiliate company owned jointly by Dana Gas and local partners. Its first investment project will be to build and operate the Gulf of Suez Liquids Plant in Egypt, a facility that will be capable of processing 55 billion cubic feet of natural gas per year.
Dana Gas' strong portfolio of assets and projects will expand further in 2008 with the Company developing the unique "Dana Gas City" concept in several new locations across the Middle East and North Africa Region, as well as actively pursuing new opportunities and projects in the Region's rapidly growing natural gas sector, in upstream, midstream and downstream activities.
With energy prices and demand on the increase across the Middle East Region, a recent report by the APICORP has estimated over US$210 billion of required investments in the region's natural gas industry in the next five years alone.
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