ERBIL, Kurdistan Region - The Sharjah-based Dana Gas company said in a statement on Wednesday that natural gas production in their operations in the Kurdistan Region have jumped by 50% since 2018, an important development which could contribute further to cleaner electricity generation in the region.
Alongside Crescent Petroleum, the natural gas company Dana Gas, which operates in the Khor Mor and Chemchemal gas fields in Sulaimani province on behalf of Pearl Consortium, produced 452 million cubic feet of gas per day (MMscf/d) by the end of 2021, compared to 305 MMscf/d in 2018. The companies together produced 16,000 barrels of condensate and 1,000 tonnes of liquefied petroleum gas (LPG) per day.
They have been operating in the Kurdistan Region since the Kurdistan Regional Government (KRG) began producing oil and gas independently of Baghdad in 2007, and selling independently in 2013.
“The production milestone is the culmination of numerous process improvements at the Khor Mor gas plant, including a bypass project completed in 2020 as well as a debottlenecking programme earlier in 2018,” the company said in a statement on Wednesday. “Together, the process improvements have grown the production by 50% from 305 MMscf/d in 2018.”
Dana Gas said earlier this month that its share of collections from the sale of Condensate, LPG and gas in the Kurdistan region rose by 80% to $184 million in 2021, compared to $102 million in 2020.
“Despite the challenges the whole world has faced over the past two years, we are proud to have continued delivering uninterrupted supply of clean-burning natural gas to support the KRI economy and enable a healthy recovery,” Majid Jafar, the CEO of Crescent Petroleum and board managing director of Dana Gas, said in the press release. “Meanwhile our major expansion plans at the Khor Mor and Chemchemal fields to target 1 billion cubic feet per day in the coming few years will enable improved services across the region for years to come.”
Jafar's comments come after Kurdistan Region Prime Minister Masrour Barzani said in October that his cabinet has increased gas production over the last two years, and that a key goal on his agenda was to double this in his remaining two years in office.
Speaking at the Middle East Research Institute (MERI) forum in Erbil, the prime minister said he wanted to make use of all the natural resources available in the Kurdistan Region, including natural gas. “My ambition is really to provide gas for the households. My plan is to build petrochemicals so that we can actually be clients and buyers of our own gas and natural resources, and then process it. That would be much more beneficial to the people of Kurdistan and for the excess gas and the natural resources that we have to be able to export it to outside,” he added.
Under the current expansion phase known as KM250, supported by the US, Dana Gas which has a 35% interest in Pearl Petroleum aims to increase natural gas production to 700MMscf/d by April 2023. “The KM250 Gas Expansion Project is supported by a $250 million financing agreement for 7 years with the US International Development Finance Corporation (DFC) which was announced in September 2021,” the company said.
Dana Gas was involved in a financial dispute with KRG for several years, but the issue over accusations that the government had underpaid it for gas production was finally settled in 2017 with the KRG agreeing to pay a final settlement of $2.24 billion to the company.
The company has said that the current phase which was halted for a year due to the COVID-19 pandemic will be followed by a new project, KM500, which aims to increase gas production to 1 billion cubic feet per day, to meet the rising demand for electricity in the Region.
The KRG has struggled with economic complications over recent years and has struggled to pay the oil companies operating in the Kurdistan Region. However, it has managed to provide regular payments to companies in recent months as the economic impact of COVID-19 lessens and oil prices increase.
In August, the KRG’s Minister of Natural Resources Kamal Atroshi issued a decree giving companies working in the petroleum industry in the Kurdistan Region 18 months to put a complete end to gas flaring; a toxic byproduct of crude oil production, and a move that would end the environmentally damaging practice.
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