Dana Gas JV to build gas liquids plant in Egypt

Uchenna Izundu
International Editor

LONDON, July 23 -- Dana Gas PJSC reported that its Bahraini affiliate Danagaz Bahrain will build, own, and operate the Gulf of Suez gas liquids plant in Egypt by late 2009.

The 55 bcf/year plant, to be built near Ras Shukheir on the western shore of the gulf, will produce 120,000 tonnes/year of propane and butane.

Egyptian General Petroleum Corp. (EGPC) will supply gas for the plant under a long-term supply contract. Danagaz and its partners also have signed the land and sea berth agreements for products exports. Civil engineering and installation construction will be performed by local contractors.

The plant will operate at highly efficient recovery rates, recovering 99% of the propane in the gas stream and 100% of the butane, Dana Gas said. Due to the nature of the gas supply, the project will produce 110,000 tonnes/year of exportable international specification propane, which will represent about 90% of the total gas liquid product from the plant.

France, Spain, Italy, and Turkey are expected to buy propane from the plant. "Potentially higher-margin Indian Ocean region markets are a future possibility," as well, Dana Gas said. The butane produced, about 10,000 tonnes/year, will be sold on long-term contracts to help meet Egypt's domestic requirements.

Rashid Saif Al-Jarwan, Dana Gas general manager, said another two plants are under development in northern Iraq.

Danagaz Bahrain, Egyptian Natural Gas Holding Co. (Egas), and Arab Petroleum Investment Corp. (APICorp) will form a joint venture, Egyptian Bahraini Gas Derivative Co. (EBGDCo), to own the project.

Danagaz Bahrain will hold 40% of the JV, Egas will have 40%, and APICorp will take a 20% stake in EBGDCo. The company also will market the liquid products from the plant.

Danagaz Bahrain is owned 66% by Dana Gas and 34% by Bahraini partners.

Contact Uchenna Izundu at uchennai@pennwell.com.

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