UAE firms begin pumping Kurdish gas
Posted:06 October 2008
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UAE-based companies Dana Gas and Crescent Petroleum have announced the start-up of natural gas production, processing and transportation via pipeline in their major joint project in the Kurdistan Region of Iraq.
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The 50:50 partners are investing $650 million under a Strategic Alliance and service contracts signed with the Kurdistan Regional Government (KRG) in April 2007, making it the largest private-sector investment in Iraq today and the largest private-sector oil & gas project in Iraq in several decades, companies said.
The gas will supply new power plants under construction near Erbil and Sulaimaniya, which will provide eventually 1,250 MW of urgently needed electricity for over 4 million Iraqi citizens. This will provide Iraq with savings of approximately $2.5 billion a year in liquid fuel import costs.
As part of the project implementation, the primary phase completed in a record time of 15 months, the companies have installed a 180 km gas pipeline across challenging mountainous terrain that sometimes required the clearing of minefields. In addition, upstream activities on seismic surveys and production wells were carried out, and brand new gas processing facilities were installed.
The initial primary phase gas production is at 75 million cubic feet per day, and will rise in stages to 300 million cubic feet per day within the first half of 2009, as the power plants become fully operational.
The joint partners said it will be adding further processing capacity to handle the additional gas quantities.
Ahmed Al-Arbeed, Upstream Executive Director for Dana Gas, said: “We are very proud of this historical milestone, as the first companies from the Middle East to invest in Iraq’s oil and gas sector. We wish to thank the leadership and cooperation shown by the KRG, and also all of our staff, our contractors, and local officials for their support in this remarkable joint effort.”
“This is the first project of its kind in Iraq, and it will provide important economic and social benefits for the Kurdistan region and all of Iraq,” said Majid Jafar, Executive Director Crescent Petroleum. “We aim now to build on these achievements in the Kurdistan Region and across Iraq, with our strategic focus on maximising economic benefit and addressing local needs.”
In parallel with supplying the local power plants, Dana Gas and Crescent Petroleum are also in discussion with the Ministry of Natural Resources in the Kurdistan Regional Government of Iraq to review the natural gas resources in the Kurdistan Region of Iraq for its optimal development and utilisation.
The companies with the Ministry of Natural Resources are developing an investment framework for the ‘Kurdistan Gas City’ project - a major gas-utilisation industrial complex to promote investment in a variety of gas-related industries to maximise local economic benefit and job creation.
The Iraqi central government has been objecting the semi-autonomous state’s decision to continually sign contracts independently without the country’s long-awaited hydrocarbon law. But Baghdad has recently signed deals with major oil companies under the former legislation.
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