Pearl Petroleum, a consortium led by Dana Gas and Crescent Petroleum of the UAE, has inked a $250 million finance agreement with the US International Development Finance Corporation (DFC) to fund gas expansion work at the Khor Mor gas plant in the Kurdistan Region of Iraq (KRI).
The 7-year DFC financing will support a rise in gas production capacity by 50 percent to 690 million standard cubic feet per day (scf/day) to meet the rising demand for clean natural gas to generate electricity and industrial expansion in the KRI. The total project cost is $630 million and the remaining financing has already been secured through a regional bank facility and the Engineering, procurement, and construction (EPC) contractor.
The KM-250 project is the first phase of a two-train expansion project at Khor Mor, with the aim of expanding the overall production capacity to reach 1 billion scf/day. After onsite construction was delayed last year because of the COVID outbreak, work began in April 2021 and is expected to be completed by April 2023.
Pearl Petroleum has invested over $2.1 billion in Khor Mor to date, with total cumulative production of over 341 million barrels of oil equivalent (boe) in natural gas and liquids. The Kurdistan Region and Iraq as a whole have benefited from the consistent supply of gas to power plants in Erbil, Chemchemal, and Bazian, resulting in significant fuel cost savings and economic gains.
Dr. Patrick Allman-Ward CEO-Dana Gas
“With our partners in Pearl Petroleum we are proud to be further developing the gas sector of the Kurdistan Region of Iraq, delivering an expanded supply of cleaner energy, and supporting local economic development. This agreement underscores our continued confidence in the region and its long-term prospects.”
The initiative has resulted in reducing CO2 to 42 million tons by displacing diesel fuel in the power generators in KRI thereby cutting greenhouse gas emissions and supporting the transition to better energy sources to combat global climate change.
Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas commented, “The DFC agreement is a testament to our successful track record and further highlights the potential of these resources and the bright future for the KRI.”
DFC’s investment in the Khor Mor expansion will substantially increase access to energy for people all across the KRI. This highly developmental project represents the United States’ continuing investment in the KRI commented Mr. Dev Jagadesan, Acting CEO of DFC.
The Kurdistan government granted Dana Gas and Crescent Petroleum exclusive rights to appraise, develop, produce, market, and sell petroleum from the Khor Mor and Chemchemal fields in the KRI in April 2007. Pearl Petroleum was formed in 2009 as a consortium, with Dana Gas and Crescent Petroleum as the majority shareholders, with OMV, MOL, and RWE later joining the consortium with a 10 percent share each.
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