ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) is set to sign two major contracts with American companies in a bid to increase natural gas production, announced the Kurdish natural resources minister on Monday.
A KRG delegation, led by Prime Minister Masrour Barzani, arrived in Washington on Saturday to "bolster political, economic and military ties with the American government and companies," Kamal Mohammed, acting natural resources minister, told reporters on Monday.
"During this trip, two contracts about oil and gas industries will be signed. The first agreement is about gas with the Miran Energy company, which consists of two companies, the US HKN [Energy] company and ONEX [Group], which work in the oil sector," the minister added.
The HKN Energy and ONEX Group announced in a joint statement on Sunday "the signing of a binding term sheet with the Kurdistan Regional Government (KRG) for the development of the Miran Gas Field through their newly formed joint venture, Miran Energy."
Russell Freeman, CEO of HKN Energy, was cited in the statement as saying that the agreement marks "a significant milestone not only for our companies, but for the energy future of the Region." He described the project as "one of the region’s most
strategic gas resources.”
The project will be carried out in stages, with gas production initially focused on meeting domestic needs, while also supporting regional energy demands and fostering long-term economic growth. The substantial reserves at Miran will play a crucial role in enhancing the region's energy security over time, said both companies.
“The aim of the contracts is to use the gas field and add it to the Region’s gas infrastructure in order to provide electricity for the Region. Part of the electricity grid used to be provided to Iraq. Therefore, we can say both the Region and Iraq will benefit from the gas," Mohammed noted.
Research estimates that the Miran Gas Field may contain up to 8 trillion standard cubic feet (scf) of recoverable natural gas. In the initial phase, which will span 18 to 20 months, production is expected to reach between 50 to 70 million scf. Following this, production will be scaled up, according to the minister.
Another contract is with WesternZagros. The combined Topkhana-Kurdamir block will be given to the American company to produce oil and gas.
Both contracts are production sharing contracts and the KRG has not consulted the Federal Government before reaching an agreement, but it is in the interest of all Iraq, Mohammed explained.
The development coincides with the Kurdistan Region's efforts to establish a 24-hour electricity project, utilizing locally produced gas. Meanwhile, Iraq faces challenges in securing reliable power sources, with its grid largely dependent on imports from neighboring countries and the Kurdish region.
