Abu Dhabi: Abu Dhabi-listed Dana Gas yesterday announced it had acquired a majority stake in a Bahraini company that plans to invest over $100 million in an Egyptian liquids gas project.

The new company called Danagaz Bahrain will be owned 66 per cent by Dana Gas and 34 per cent by prominent Bahraini partners.

An agreement was signed by Shaikh Hamad Bin Ebrahim Al Khalifa of Bahrain and Hamid Dhiya Jafar, Executive Chairman of Dana Gas.

"We welcome this partnership with Dana Gas who, with their regional private-sector approach and technical and financial capabilities, can add value to our first project in Egypt, as well as in jointly pursuing further business opportunities," said Shaikh Al Khalifa.

"This is an important strategic step for Dana Gas from several perspectives," said Rashid Saif Al Jarwan, general manager of Dana Gas.

"Firstly, we join with highly reputable partners in Bahrain, where we plan to develop further projects in the natural gas business. Secondly, it leads to our first investment in Egypt, a country with over 70 trillion cubic feet of natural gas reserves and growing, with a promising business environment for further investments in this important strategic sector.

"Last but not least, the Gulf of Suez Gas Liquids Plant enters Dana Gas into long-term joint-venture partnership with an important and esteemed organisation in the region's energy industry the Egyptian Natural Gas Holding Company (EGAS)."

Joint venture

The Gulf of Suez Gas Liquids Plant project involves the engineering, fabrication, installation and operation of a high-efficiency gas liquids extraction and manufacturing plant on the western shore of the Egyptian Gulf of Suez. The project will be executed by a joint venture with Danagaz (Bahrain), and state-owned Egyptian Natural Gas Holding Company (EGAS) holding 40 per cent equity each and Saudi-based Apicorp with 20 per cent.

"The investment in the Egyptian project will exceed $100 million," a source involved in the deal told Gulf News, adding: "Dana Gas is eyeing more energy-related projects in the region."

The consortium has signed an agreement for a 15-year supply of natural gas feedstock for the plant with the EGPC, with an option to extend after that period. The main agreements for the project are in place and the implementation phase is expected to be completed in 24 months.