Abu Dhabi National Energy Co (Taqa) has agreed with partners to invest Ôé¼800 million in the joint development of a gas storage project in the Netherlands.
The gas storage facility Bergermeer, which will EuropeÔÇÖs largest, is to be constructed in an empty gas reservoir in the Alkmaar region north of Amsterdam.
The reservoir consists of porous rock about two kilometres below the surface. Gas is injected into the pores when demand is low in summer months, and is then pumped back up in the winter for distribution.
Taqa expects the environmental and safety assessment permits required for construction to be granted in 2010, with commercial operation scheduled to commence from 2013.
Taqa is working on the project alongside Dutch oil and gas firms Dyas and Energie Beheer Nederland (EBN), as well as Petro-Canada.
Taqa, which will operate the facility, owns a 36 per cent stake, while Dyas and Petro-Canada own 12 per cent each. EBN holds a 40 per cent share.
In exchange for working gas storage capacity and a participating interest in the technical operation of the facility, Russian gas giant Gazprom has agreed to provide the so-called ÔÇÿcushion gasÔÇÖ, which will be permanently stored in the reservoir to provide the pressure required for commercial operation.
Bergermeer will have a volume of 4 billion cubic metres, of which more than half will be made available to third parties. The gas would be enough to fuel about 1.6 million Dutch households.
The facility is being designed as a zero-emissions plant, which means there will be no emissions of hydrocarbons or carbon dioxide into the atmosphere.
The Netherlands is keen to position itself as a gas hub in Europe as its own natural gas resources decline. The country plans to become a distribution point for gas in north-west Europe and to import liquefied natural gas (LNG).
The country already has three smaller gas storage facilities and is developing three terminals to receive LNG.
Paul van Gelder, managing director of Taqa in the Netherlands said: "I am delighted with this final investment decision by the BGS Consortium and Gazprom export. This is a substantial milestone and represents Taqa's commitment to this flagship project.
ÔÇ£The transfer of high-end technological knowledge and skills from this programme will provide the Netherlands, and particularly the Alkmaar region, with substantial employment and career development opportunities."
Alexander Medvedev, general director of Gazprom export, said: "The Bergermeer Gas Storage is a large-scale endeavour. Being linked to gas transit systems very close to major trading platforms, it can cover demand in peak moments and conclude deals on the spot market.ÔÇØ
He concluded: ÔÇ£We firmly believe that Bergermeer UGS has all the makings of a true success story."
The final investment decision follows a memorandum of understanding signed between the companies at the end of last year.
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