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| 22 March, 2018

UAE's Pearl Petroleum to increase gas output at KRG field

The increased gas production will support local power generation

Image used for illustrative purpose. 
A general view shows natural gas wells at the Habshan gas complex in UAE's capital Abu Dhabi.

Image used for illustrative purpose. A general view shows natural gas wells at the Habshan gas complex in UAE's capital Abu Dhabi.

REUTERS/STR New

UAE - Pearl Petroleum, the 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 sell the additional quantities of gas that it plans to begin producing later this year.

The increased gas production is expected to boost the much-needed local domestic electricity generation, said a statement.

The GSA was signed on January 30 by the KRG Minister of Natural Resources Dr Ashti Hawrami, CEO of Crescent Petroleum Majid Jafar and CEO of Dana Gas Dr Patrick Allman-Ward, to enable an increase in delivered gas production from the Khor Mor Field by an anticipated 80 million cubic feet of sales gas per day before the end of 2018, from the current level of 305 million cubic feet per day.  

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All contractual conditions precedent for the agreement have since been satisfied and consequently the project work has now commenced. 

In August last year, Pearl Petroleum reached a full and final settlement with the KRG of the arbitration between them, including receiving $1 billion 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 program in both the Khor Mor & Chemchemal fields, as well as 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 this year which will deliver much needed gas to fuel additional affordable power generation for the benefit of the local population and Iraq as a whole. 

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 million cubic feet per day of gas production, together with associated liquids.

Total investment to date exceeds $1.3 billion with total cumulative production of over 228 million barrels of oil equivalent (boe), which has resulted in billions of dollars of fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole, the statement said.

Operation full-time staff numbers are close to 500 with over 80 per cent localisation, and training programmes to increase this figure further. In addition, Pearl has contributed to local communities with support for local power generation, education and healthcare facilities, as well as support programmes for internally displaced Iraqis.

Dana Gas has previously announced that the appraisal programme has to date resulted in proven certified reserves of 15 trillion cubic feet (tcf) of gas and 310 million barrels condensate.

Dr Ashti Hawrami 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. We are pleased to see the further commitment of expansion and investment by the companies and the anticipated growth in gas supplies will make a positive contribution to the growing domestic needs for more electricity.” 

Majid Jafar commented: “The gas sales agreement marks an important milestone in our 10th 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 $600 million 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.”

Dr Patrick Allman-Ward added: “We and our partners in Pearl Petroleum are proud to be the largest investors and producers in the gas sector of the Kurdistan Region. Despite all the challenges we have maintained our production levels and operations and now with the settlement of all past receivables last summer and continuous payments since then, we look forward to significantly growing production to meet the growing demand for gas and electricity in the Kurdistan Region and Iraq as a whole.” 

Pearl has also implemented a corporate social responsibility program to support local communities, including providing school supplies, drinking water treatment, generators and fuel enabling 24-hour electricity for local villages, mobile medical units, and youth sports facilities, as well as financial support for 1,000 orphans from the Chemchemal area in partnership with a local charity Foundation. These initiatives are assisting the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital, the statement said. - TradeArabia News Service

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