Norwegian oil and gas company DNO International has announced that it has signed a gas sales and purchase agreement with Kurdistan Region of Iraq for the supply of gas from Summail field in its Dohuk License
The gas is likely to help replace the diesel currently used to generate electricity in a 500MW power plant in Dohuk, located 40km from the field.
Company sources said the initial deliveries will be around 2.83mn cubic metres (cu m) per day, sold on a take-or-pay basis for the duration of the production sharing contract or until deliveries reach 28.3bn cu m.
The price of gas will range between US$3 and US$4 per 28.3 cu m over the period of the contract.
Bijan Mossavar-Rahmani, executive chairman of DNO International, said, “We are pleased to be the first to sign a commercial gas sales agreement with a state buyer in Kurdistan Region of Iraq.
“Development of Summail is a win-win as we contribute to lowering fuel costs in local power generation while growing and diversifying the company’s production and revenue base.”
The next step in the fast-track development of the field is the completion of the Summail-1 discovery well and the installation of a 24-inch pipeline to transport gas.
The first gas from the well is planned in January 2014.
The second well - Summail-2 - will spud in Q4 2013 and the Summail-3 well is scheduled for 2014.
DNO International holds a 40 per cent interest in and operates the Dohuk License.
Genel Energy holds another 40 per cent interest and the Kurdistan Regional Government holds the remaining 20 per cent stake.
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