“The Company informs the market that Pearl Petroleum Co. Ltd (“Pearl Petroleum”) has commenced arbitration proceedings against Enerflex, the EPC contractor of the KM 250 project,” Dana Gas said in a disclosure on the Abu Dhabi Securities Exchange (ADX).
Dana Gas said last month that it had terminated its contract with Enerflex, citing persistent performance issues that severely disrupted an $806 million expansion project at Khor Mor known as KM250.
In response, Enerflex accused Dana Gas of wrongfully terminating their contract and blamed security concerns at the site that forced them to suspend operations. It said that Dana Gas made “a wrongful attempt … to circumvent Enerflex’s contractual rights to suspend performance while the project site remains unsafe.”
Pearl Petroleum is a consortium that includes Dana Gas.
“That termination took Effect on 9 September, and Pearl Petroleum has initiated arbitration action in accordance with the contract to recover costs and damages arising from Enerflex’s defective performance,” Dana Gas said.
The Emirati company added that it will update the market with the new expected completion date of KM250 as it works to bring the project back on track.
Khor Mor in Sulaimani’s Chamchamal district frequently comes under attack, reportedly by Iran-affiliated Iraqi militias taking advantage of its strategic and economic importance for the Kurdistan Region, leading to major power disruptions across the Region and hindering expansion projects at the site.
On April 26, a drone strike at the site killed four Yemeni nationals and injured several others who were repairing damage from a previous attack. The strike caused Dana Gas to suspend production temporarily.
The Kurdistan Regional Government (KRG) condemned the strike as an act of terrorism, and four members of Iraq’s Iran-backed Popular Mobilization Forces (PMF) were arrested in connection with the attack, but in July a Baghdad court ordered their release, citing a lack of evidence.
Following a drone strike in January, Dana Gas warned that attacks on Khor Mor directly impact the lives of the Kurdistan Region’s citizens.
Crescent Petroleum and its affiliate, Dana Gas, struck an agreement with the KRG in 2007 to develop the Region’s substantial gas resources. They also agreed to establish Kurdistan Gas City, a major new gas-utilization industrial complex to promote private sector investment.
