Pearl Petroleum’s investment in the Kurdistan Region of Iraq's (KRI) gas project is one of the largest private investments in oil and gas projects sector. Gas project in Kurdistan provides electricity to over four million Iraqis.
Increased availability of electricity from
8 hours to 22 hours
This increase in capacity is estimated to boost long-run GDP by some
$6.2 - 15.5bn
(26-66% of GDP)
This increase in reliability is estimated to result in avoided business costs of
$9.6 - $21.2bn
(41%-90% of GDP).
Dana Gas, the Middle East's leading regional private sector natural gas company, and Crescent Petroleum, the oldest private oil and gas company in the Middle East, remain one of the largest investors and producers in the Kurdistan Region of Iraq’s (KRI) Oil & Gas sector. The companies, along with European partners OMV and MOL, have thus far invested over US$ 1.1 billion and are currently producing an average of 82,000 barrels of oil equivalent (boe) per day, including 325 million cubic feet of gas per day and total cumulative production of more than 165 million boe.
Dana Gas and Crescent Petroleum entered into agreements with the Kurdistan Regional Government (KRG) in 2007 for the appraisal and development of two major gas fields (Khormor and Chemchemal) in the KRI and were given exclusive rights to appraise, develop, process, market and sell petroleum from these substantial gas fields. The first phase of the project envisaged provision of natural gas supplies to fuel two major domestic electric power generation plants being built in Erbil and Chemchemal, as well as for local industries and export.
Major achievements of the project so far include: installing a 180km gas pipeline across challenging mountainous terrain that required the clearing of minefields; first gas production after only 16 months; drilling successfully to tertiary reservoir formations at depths of 2,300 metres, and importing and installing over 64,000 tonnes of equipment in over 3,500 truck-loads, with pipe material supplied from China and Thailand, and the state-of-the-art gas processing plant imported from the USA.
Whilst our investment has ensured almost continuous power supply for over 4 million people in the Kurdistan Region, in contrast to the electricity crisis in other parts of Iraq, and provided over US$ 15.9 billion (inception till December 2014) of savings in fuel costs for the government as a result of the migration from diesel-to-gas to fuel the power plants, the more substantial and long-term benefits of this investment arise through its downstream impacts, which have been reported in the company’s recently published Socio-Economic Benefits report.
The Kurdistan Gas Project will continue to make a substantial contribution towards KRI’s economic and social development, and help the KRG meet its strategic policy and development priorities of Enabling Infrastructure; Economic Growth; Social Well-being (measured by the UN Millennium Development Goals); and Environmental Protection at the regional, national and international levels.
The Socio-Economic Benefits assessment, which has been published with assistance from global consultants PwC, highlights Dana and Crescent’s transformational impact in the Kurdistan Region of Iraq.
Apart from Direct benefits, downstream economic benefits from Plentiful Electricity and Reliable Electricity Supply gives a range of benefit between US$ 9.6bn to US$ 15.5bn as the most likely range of benefit to the economy from the Kurdistan Gas Project. This impact range is assessed to be between 40% - 66% of the 2011 GDP of Kurdistan (US$ 23.6bn).
Provision of cheap gas as feedstock to the two power plants supporting 46% of the rated capacity of KRI, and trebling the capacity that existed. This increase in capacity is estimated to boost long-run GDP by some US$ 6.2 – 15.5bn (26% – 66% of 2011 GDP).
Increasing the average hours of power each day from 8 hours in 2006 (2 hours in 2002 and before) to 22 hours in 2012; nearly an uninterrupted supply. This increase in reliability is estimated to result in avoided business interruption costs of US $9.6 – $21.2bn (41% – 90% of 2011 KRI GDP).
The provision of cheap natural gas to the two power plants supports the generation of electricity at internationally and nationally competitive rates. The wider impact of this has not been quantified, however, this supports the cheap electricity tariffs currently prevailing in KRI and eases pressure on Government Ministries which financially support low tariffs.
“One cannot overlook the massive impact that the development of gas resources has had on reviving the Region and its people in a short space of time. We are proud to have pioneered this project and the impact that this project has achieved as highlighted in this report”
Mohammed E. Makkawi,
Dana Gas-Crescent Petroleum Joint Operations, Kurdistan.
“The report provides us with a macro view of our impact in the KRI, and it gives us great pride in having contributed to the growth of Kurdistan’s economy on such a large scale”
Dana Gas, Kurdistan-Iraq.