Pearl Petroleum, the company consortium led by Crescent Petroleum and Dana Gas of the UAE, has signed a 10-year gas sales agreement (GSA) with the Kurdistan Regional Government (KRG) to supply and sell additional quantities of gas to boost local domestic electricity generation
The GSA aims to enable an increase in delivered gas production from the Khor Mor Field by an anticipated 80 mmcfd of sales gas before the end of 2018, from the current level of 305 mmcfd. All contractual conditions precedent for the agreement have since been satisfied and consequently, the project work has now commenced.
In August 2017, Pearl Petroleum reached a full and final settlement with the KRG of the arbitration between them, including receiving US$1bn in cash from the KRG for past receivables and committing to expand their investment and operations in the region.
These expansion plans include a multi-well drilling programme in both the Khor Mor and Chemchemal fields, as well as the installation of additional gas processing and liquids extraction facilities. The fields are operated jointly by Crescent Petroleum and Dana Gas on behalf of Pearl Petroleum.
The initial phase of this expansion is through a fast-track debottlenecking project, whereby Pearl will increase daily production of natural gas and condensates from the Khor Mor Field by around 25 per cent later to deliver gas for power generation for the region. This accelerated debottlenecking project represents an important first step in the overall plan to increase gas production by a further 125 per cent within two years after that to eventually reach around 900 mmcfd of gas production.
Dr Ashti Hawrami, minister of natural resources of the KRG, said, “The Kurdistan Region of Iraq holds potentially more than 200 tcf 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, CEO of Crescent Petroleum and board managing director of Dana Gas, commented, “The gas sales agreement marks an important milestone in our tenth year of continuous production, and the beginning of a new chapter of expansion in operations and production which will see a further investment of over US$600mn over the coming few years and a more than doubling of production.”
“The gas we have produced has led to significant fuel savings and social and economic value for the economy, and we hope to grow this in the years to come from the significant resources of these world-class fields, for the benefit of the Kurdistan Region and all of Iraq,” Jafar added.
