The consortium operating Kurdistan’s most prolific gas field is negotiating a potentially paradigm-shifting deal to sell directly to Baghdad.
Iraq’s Oil Ministry has completed a pipeline spur to connect the Khor Mor gas field with federal infrastructure in Kirkuk, highlighting the potential for oil and gas companies in the Kurdistan region to seek new commercial arrangements with Baghdad as the Kurdistan Regional Government (KRG) falls severely behind on payments.
The new pipeline spur is only 1 kilometer long and 16 inches in diameter, according to the Oil Ministry, but it makes a key connection between existing pipeline networks and federal infrastructure — creating the possibility for gas to be pumped from Khor Mor to Kirkuk for power generation.
“The pipeline will enable the supply of 100 million standard cubic feet per day [scf/d] to feed the power station and increase electricity production,” said a Nov. 6 statement from the Oil Ministry.
The pipeline construction appears to be a sign that federal authorities are optimistic about concluding an agreement to buy gas from the Pearl consortium — led by the UAE’s Dana Gas and Crescent Petroleum — which operates the Khor Mor field under a contract with the KRG. The federal Iraqi Cabinet said in a July 11 statement that the Oil Ministry had been authorized to negotiate with Kurdistan region gas producers to buy gas for federal Iraqi power plants.
Neither the Oil Ministry nor the Pearl partners have announced a finalized gas sales agreement.
Source: Iraq Oil Report