$600m investment to increase production 57% within 2 years.
Dana Gas and Crescent Petroleum have announced the full resumption of the expansion project at the Khor Mor field in the Kurdistan Region of Iraq (KRI), which the companies jointly operate on behalf of the Pearl Petroleum consortium with a $600 million investment.
“After a year of delay due to the COVID pandemic, we are pleased to fully resume the KM250 expansion project to invest $600 million and grow the gas production almost 60% within 2 years from now, supporting the local electricity provision even further," saaid Majid Jafar, CEO of Crescent Petroleum and board managing director of Dana Gas. "Despite the challenges the whole world has faced over the past year we have kept our operations safe and managed to grow production and we are grateful to all our staff and to the KRG for its support.”
The $600 million will add 250 million cubic feet per day of much-needed additional gas production to supply the local power stations. The project construction work had been put on hold due to the COVID pandemic but is now on track for a new target start date of April 2023, after agreement to lift the force majeure with both the Kurdistan Regional Government (KRG) and the contractor.
Under a Gas Sales agreement signed in March 2019 with the KRG Ministry of Natural Resources, Pearl Petroleum will sell the additional quantities of gas to supply the power stations with affordable and environmentally cleaner fuel, and further enhance electricity supplies. Today over 80% of the KRI’s electricity generation is enabled by the gas produced by the companies.
Current production at the Khor Mor field is 440 million cubic feet per day of natural gas as well as 15,700 barrels per day of condensate and 1,020 tonnes of liquified petroleum gas (LPG), or a total of 110,400 barrels of oil equivalent (boe) per day, making it the largest overall producer in the KRI and the largest private sector upstream gas operation in Iraq. After the KM250 train, there are plans to add a further KM500 train which would take production to almost 1 billion cubic feet per day by 2024.
Total investment to date exceeds $2 billion with total cumulative production of over 332 million barrels of oil equivalent (boe), which has resulted in significant fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole. In addition 43 million tonnes of CO2 emissions have been eliminated by displacing liquid fuels, which in turn has made a positive contribution to tackling global climate change as well as reducing local air pollution.
Dr. Patrick Allman-Ward, CEO of Dana Gas, added: “With our partners in Pearl Petroleum we are 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 the next exciting phase of growth with the Khor Mor expansion, which will be carried out under strict health protocols to ensure the safety of our staff and service providers.”
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