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Bloomberg noted over the holiday interim that InterOil Corp., a Canadian energy firm whose share price rose more than fivefold in 2009, will construct a liquefied natural gas (LNG) plant in Papua New Guinea “at less than half the cost of a rival project” in the country, the $15 billion Exxon Mobil Corp.-led venture. Per InterOil’s VP of capital markets:
“Papua New Guinea’s economy may double in size because of the Exxon-operated project. The InterOil venture could boost the nation’s GDP by as much as another 40%.”
InterOil officials report that the government will have a 20.5% stake in the project.
Sharjah-based Dana Gas, the Gulf’s first privately run natural gas firm, reported a 31% increase in gross profits compared to the same period last year. Concurrently, net profits grew more than eleven-fold. As usual, the firm’s Egyptian operations played a central role to its financial results; in fact, during the second quarter alone two new fields there came on stream, the firm made a new gas discovery, and it realized three successful appraisal wells–all adding to gas reserves. However, according to CEO Mr Ahmed Al-Arbeed, condensate sales stemming from its operations in the Kurdistan Region of Iraq were just as pivotal to the firm’s recent success. Dana Gas signed strategic partnership agreements with both an Austrian and a Hungarian-based integrated oil and gas group during the second quarter, the beginnings of the culmination of a $400 million investment in the region made in 2003 when the company became the first Middle East firm to venture into the Iraqi energy sector post U.S.-invasion.
Dana Gas makes a wonderful long-term play, in my view, based not only on the fundamentals of natural gas and the expanding role I expect it to play in global energy markets, but more broadly speaking as a proxy on MENA growth. I’m adding it to this site’s long-only, mock frontier portfolio, which will be used to manage and grow a mythical basket of capital. Dana Gas will be our first holding, as of today.