8 January 2019
EKH aims to leverage Shield Gas’s existing operational platform to capitalize on the growth potential of the UAE’s gas network & distribution market; plans to replicate NatGas’ successful business model in Egypt
08 January 2019 | Cairo Egypt Kuwait Holding Company (EKHO.CA on the Egyptian Exchange and EKHOLDING on the Kuwaiti Exchange), one of the MENA region’s leading investment companies, is pleased to announce that it has completed the acquisition of 100% of Shield Gas Group, a natural gas distribution player in the United Arab Emirates’ central gas systems market with operations in UAE since 1984.
The acquisition marks EKH’s expansion into the UAE’s and the GCC underpenetrated gas distribution market and provides the company with a platform to replicate the success it has achieved with its Egyptian operation NatGas. The UAE market boasts significant growth potential as the government pushes to substitute gas cylinders consumption – currently constituting over 52% of the country’s 1.4 million households with more economic natural gas network connections and LPG central gas systems. The drive comes as the Abu Dhabi National Oil Company (ADNOC) has recently announced plans to develop the USD 20 billion North-West Area sour gas project, holding c. 5 trillion cubic feet of gas and production estimates that could supply gas to over 400 thousand homes.
“The UAE’s natural gas distribution market today enjoys the same dynamics of its Egyptian counterpart where EKH has had incredible success in capitalizing on sound economic policy and market trends,” said EKH’s CEO Sherif El Zayat. “Among a handful of regional markets with liberalized energy prices, the UAE government stands to drive significant savings by phasing out gas cylinders with centralized gas systems that come at a fraction of the cost. Companies like Shield Gas are thus prime candidates to capture this growth potential and at EKH we have the knowhow, systems and the track record in a larger more advanced market to be able to steer this growth and deliver value to our shareholders. Our business plan targets a fivefold expansion in Shield Gas’ operations over the coming five years.”