SHARJAH, 6th March – Pearl Petroleum Company Limited, the consortium led by Crescent Petroleum and Dana Gas of the UAE, has signed a new 20-year Gas Sales Agreement, GSA, with the Kurdistan Regional Government.
The agreement will enable production and sales of an additional 250 MMscf/day that the consortium aims to produce by 2021 as part of their expansion plans in the Kurdistan Region of Iraq, KRI, to boost much needed local domestic electricity generation.
The GSA was signed by Dr. Ashti Hawrami, Minister of Natural Resources on behalf of the Kurdistan Regional Government, and Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, on behalf of Pearl Petroleum. All approvals for the agreement, including by the Kurdistan Region Council for Oil and Gas Affairs and the Board of Pearl Petroleum, have since been granted, with project work now under implementation.
Commenting on the signing, Dr. Ashti Hawrami said, “This agreement is an important step for us as we deliver improved services to the people of the Kurdistan Region of Iraq through enhanced electricity generation from the increase in gas production by the Consortium. The Kurdistan Region holds significant reserves of gas and the KRG is committed to playing a positive role in the growing gas and electricity needs of Iraq and the region.”
Majid Jafar said, “This gas sales agreement opens a new chapter in the expansion of the Kurdistan Gas Project that will see a further investment of over $700 million in coming years to expand production up to 900 MMscf/day, further fuelling the region’s economic growth and development. We look forward to developing the significant resources from these important fields, for the benefit of the Kurdistan Region and all of Iraq.”
For his part, Dr. Patrick Allman-Ward, CEO of Dana Gas, added, “Dana Gas and our partners in Pearl Petroleum are particularly proud to be investing further in the gas sector of the Kurdistan Region of Iraq, delivering a reliable source of cleaner energy, and supporting local economic development. The continuing receipt of payments in a timely manner gives confidence for our continued investment commitment as we enter our second decade of production.”
The Kurdistan Gas Project was established in 2007 as Dana Gas and Crescent Petroleum entered into agreement with the Kurdistan Regional Government for certain exclusive rights to appraise, develop, produce, market, and sell petroleum from the Khor Mor and Chemchemal fields in the Kurdistan Region of Iraq.
The US$700 million expansion underway at the Khor Mor plant will include the addition of two new production trains at the Khor Mor plant, as well as drilling of new wells with plans to raise production from the current 400 MMscf/day to reach 650 MMscf/day by 2021 based on this latest GSA, and then to 900 MMscf/day beyond that by 2022. This follows the 30 percent production increase from debottlenecking throughput at the Khor Mor plant, which brought current total production to 106,000 barrels of oil equivalent per day (boepd), making it the largest regional private sector upstream gas operation in Iraq today.
Total investment in the Kurdistan Gas Project to date exceeds US$1.6 billion, with total cumulative production of over 260 million barrels of oil equivalent (boe), delivering billions of dollars in fuel cost savings and wider economic benefits for the Kurdistan Region and Iraq as a whole.