|
UAE's Dana Gas signs deals with Kurdistan
government
16.4.2007
|
|
|
|
April 16, 2007
DUBAI, -- The UAE's Dana Gas has signed an
agreement with Iraq's Kurdistan regional government
(KRG) to evaluate development of the region's gas
reserves, the company said in a statement yesterday.
The deal may eventually lead to the semi-autonomous
region in northern Iraq exporting gas to
neighbouring countries.
Dana Gas also won a service contract from the
regional authority for the rapid installation of
processing and transmission facilities at the Khor
Mor field to begin supplying gas for power
generation by January 2008.
Dana Gas' initial investment commitment will be
around $400m. It marks the first entry of a Middle
East company into the Iraqi energy sector since the
US-led invasion in March 2003.
Dana Gas and the government will draw up plans for a
large gas-fed industrial complex, to be named
Kurdistan Gas City, which may include petrochemical,
metals and other heavy industry plants.
"This is a high level broad agreement whereby we
work together with the regional government to
develop the long-term plans for overall gas
development and optimal utilisation," Dana Gas
Business Development Director Majid Jafar said.
"There is an immediate need for power generation as
a priority, there is also a strong desire to use
this valuable resource to encourage industrial and
broader economic development and job creation, and
longer term there is also the possibility for
potential exports, most likely by pipeline."
The Kurdistan region has disagreed with some members
of Iraq's central government over production sharing
agreements (PSAs) it signed with oil companies such
as Norway's DNO long before Iraq's cabinet endorsed
a draft oil law in February.
The companies were exposed to the risk the contracts
would be revised under the new law, which is still
awaiting parliament's ratification.
Jafar said he was confident that the region was a
sound investment prospect. Dana Gas' deal, as a
service contract rather than a PSA, was unlikely to
attract controversy, he said.
Dana Gas plans initial production of 150 million-200
million cubic feet per day (cfd) from the Khor Mor
field, which was never fully developed and was shut
after the first Gulf War in 1991. It will build
about 180km of pipelines for the gas with larger
capacity to handle future increases in production
and any additional discoveries.
The United Arab Emirates company aims to eventually
double output from Khor Mor to 300 million cfd,
depending on reserves that it finds in place. The
UAE's largest publicly traded energy company by
market value will also make an appraisal study of
the Chemchemal gas field.
An industry source estimated possible reserves at
both fields of between 3 trillion to 4 trillion
cubic feet, but said reserves could be much larger.
The gas will initially supply two power plants under
construction near the cities of Erbil and
Sulaimaniyah.
"The Kurdistan region is in urgent need of natural
gas as fuel for electricity generation projects that
are long overdue and will benefit not only the
people of the Kurdistan region but contribute to
affordable electricity for the whole of Iraq," the
prime minister of Iraq's Kurdistan region, Nechirvan
Barzani, said in the statement.
Use of domestic gas for the region's power plants
will save the region up to $1.5bn as it substitutes
the use of liquid fuels in generators currently
used.
Reuters
Top |
Kurd Net
does not take credit for and is not responsible for the content of news
information on this page
|
® 