Dana Gas builds momentum in first year of operations

New projects, regional expansion and potential acquisitions have got Dana Gas off to a steady start.

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By  Stuart Matthews Published  December 5, 2006

Dana Gas is the Middle East’s first regional private-sector natural gas company and at the end of its third quarter in operation, it reported a net income of AED 784 million (US $213.4 million). The company started trading on the Abu Dhabi Stock Market on 6 December 2006, and has the largest regional ownership amongst UAE listed companies, with more than 63% of its shares held by non-UAE citizens, mainly from across the GCC. “Dana Gas has achieved several important milestones,” said Rashid Saif Al-Jarwan, General Manager. “Aside from preparing for commencement of its UAE gas operations, the company has completed its first acquisition, its first new project development, and its first international strategic alliance.” Among the company’s most recent announcements is an agreement with Centurion Energy International to buy all of Centurion’s outstanding common shares in a deal likely to be worth US $1.02 billion. Centurion Energy is headquartered in Calgary and is working on oil and gas exploration and production in Egypt, Tunisia and offshore West Africa. The acquisition requires the approval of a two-thirds majority of shareholders, who will vote at a special meeting to be held in early January 2007. If the deal meets with shareholder approval, it will help achieve the Dana Gas aim of accelerating growth through acquisition of exploration and production operations. Other milestones for the company include its SajGas subsidiary making progress on preparations for imported gas. The facilities, including the receiving platform, pipeline and SajGas plant are ready to be integrated with the existing gas network in Sharjah and will be tied in just prior to commissioning. Project completion and commissioning has been slowed by delays in Iran, at the central gas-processing platform, though it is now being reported that work is more than 90% complete. Commercial negotiations between Crescent Petroleum, which holds the supply contract, and the National Iranian Oil Company are ongoing. Also, Dana Gas’s United Gas Transmissions Company subsidiary is constructing a 48-inch common user gas pipeline in a joint venture with Emarat, to transport both domestic and imported supplies to Hamriyah. Phase 1 was completed and put into service last June. Phase 2 is scheduled for completion in June 2007, following the award of the main construction package, something that is expected to be announced shortly, around mid-December. The company has also signed a deal to build, own, and operate the Egyptian Gulf of Suez Gas Liquids Plant in partnership with the state-owned Egyptian Natural Gas Holding Company, EGAS. “We are pursuing an aggressive growth strategy based on a combination of both acquisition of existing strategic positions and projects, and business development of new projects,” said Al-Jarwan. “Over the next twelve months, and in addition to the execution of our current projects, we will be working to expand our presence in the upstream sector in North Africa and some countries in the Gulf Region, and in downstream projects in places like Saudi Arabia and Qatar. We also are pursuing projects in South Asia, including leading a Gulf consortium for the privatisation of the Pakistani state gas companies, and also a project to build an innovative LNG receiving facility near Karachi, in partnership with SBM.” As part of its strategy as a regional company, Dana Gas has also opened a new office in Al Khobar, Saudi Arabia, to supplement the work of its head office in Sharjah. “This office won’t be the end of our expansion plan — it is only the beginning,” said Al-Jarwan. The company has further regional offices planned for Qatar, Bahrain and Egypt.

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