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Dana, Crescent kick off Kurdish natural gas production

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Oct. 6 -- Dana Gas and equal partner Crescent Petroleum have started natural gas production in Iraq's northern Kurdistan region after commissioning the first stage of a $650 million project.

The two companies said they have started production of 75 MMcfd of gas from Khor Mor field. Output is expected to gradually reach 300 MMcfd in first half 2009.

Gas produced will feed a electric power plant in Erbil province, while in a later stage the project would feed another power plant under construction in Suleimaniya province. The total power generation of the two plants would be 1,250 Mw.

Gas from Khor Mor field will be transported by a 180-km pipeline to feed the two plants.

In April 2007 the Kurdistan regional government awarded the two companies a service contract to develop, process, and transport gas from Khor Mor field on a fast-track basis, and to appraise and develop the nearby Chemchamal gas field.

Khor Mor field has never been fully developed and has not operated since 1991. The field has estimated gas reserves of 1.4 tcf. Chemchamal, which has never been appraised or developed, has estimated reserves of 2.2 tcf.

Crescent and Dana also are developing a 'Gas City' business park in the area using gas as a feedstock for industries such as petrochemicals, steel, building materials, fertilizers and manufacturing.

Kurdistan Gas City, which will include industrial, residential, and commercial components in an integrated city, has a targeted initial basic infrastructure investment of $3 billion.

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