Enerflex disputes Dana Gas contract termination
ERBIL, Kurdistan Region - Enerflex, a supplier for the gas industry, on Wednesday accused Dana Gas of wrongfully terminating their contract at a Khor Mor gas field expansion project and blamed security concerns at the site that forced them to suspend operations.
Dana Gas on Tuesday announced the termination of its contract with Enerflex, citing persistent performance issues that severely disrupted the expansion project.
"The ongoing impact of these performance issues has materially affected Enerflex’s ability to meet its contractual obligations, leading to unacceptable delays and hindering the progress and timely completion of the Khor Mor gas expansion project,” Dana Gas said in a statement.
The company terminated its contract with Enerflex and said this "will enable Pearl Petroleum to assume direct control over the remaining phases of the project."
Pearl Petroleum is a consortium that includes Dana Gas.
In response, Enerflex accused Dana Gas of “a wrongful attempt… to circumvent Enerflex’s contractual rights to suspend performance while the project site remains unsafe" and said that it intends to dispute the termination.
Enerflex said that due to security concerns it had declared force majeure, a legal clause in contracts that excuses one or both parties from fulfilling their contractual obligations when events that are beyond their control make it impossible or impractical to carry out the contract.
Khor Mor has been the target of drone strikes. On April 26, a drone strike killed four Yemeni nationals and injured several others who were repairing damage from a previous attack.
Production at the field was temporarily suspended after the attack and Dana Gas announced it was restored on May 3.
The Kurdistan Regional Government (KRG) condemned the drone strike as an act of terrorism. Four members of Iraq’s Popular Mobilization Forces (PMF) were arrested in connection with the attack, but last month a Baghdad court ordered their release, citing a lack of evidence.