Dana Gas and Crescent Petroleum hail progress in Iraq

Iraq_gas

Dana Gas PJSC and its partner and joint operator Crescent Petroleum have given a technical update on the progress of their joint operations two years since they started production from their major gas project in the Kurdistan region of Iraq.

The project has now reached an overall production and processing capacity of 200 mcf per day, and supplies the fuel needs of the domestic power stations in the region. The project partners, who were joined last year by OMV of Austria and MOL of Hungary in the Pearl consortium, have so far invested more than US$850 million under contracts signed with the Kurdistan Regional Government (KRG) in April 2007.

It remains the largest energy investment by any company in Kurdistan and the whole of Iraq. Current gas production ranges from 160 mcf to 180 mcf per day to meet the prevailing demand of the two gas-fired power stations at Erbil and Chemchemal. It has a combined capacity output of 1,250 MW, providing almost continuous electricity to the communities of the Kurdistan Region.

The company says that in total, more than 72 bcf of gas and 3.3 million barrels of liquids have been produced since the start of production in October 2008, providing billions of dollars of savings in fuel costs for electricity for the Kurdistan Regional Government and the people of Iraq.

Production capacity is currently expected to rise to 300 mcf per day by 2012, as well as 14,000 bpd of condensate and 1,000 tonnes per day of liquid petroleum gas (LPG), from new LPG plant currently under commissioning in preparation for start-up later this month.

"We are very proud of this historical milestone, especially as it has been achieved with the cooperation and support of the KRG, as well as our partners, contractors and local staff," said Ahmed Al-Arbeed, CEO of Dana Gas.

"We hope to build on this achievement to grow our projects and enable further progress and prosperity for the local community."

During the project implementation, the companies installed a 180 km gas pipeline across challenging mountainous terrain that on occasion required the clearing of minefields, and achieved first gas production in a record time of just 16 months for a project of this scale.

Dana said that included carrying out upstream activities on seismic surveys and production wells, drilling successfully to tertiary reservoir formations at depths of 2,300 m, and importing and installing the brand new gas processing facilities.

"The investment by the companies is the largest energy investment in Iraq today, and has already delivered tangible benefits for the people of the Kurdistan region and all of Iraq in terms of enabling electricity supply and fuel cost saving," said Majid Jafar, Executive Director of Crescent Petroleum.

"This shows what can be achieved by the private sector, even under difficult circumstances, when the right policies and investment framework are adopted."

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