Crescent enters talks with Iraq provinces over gas cities

10 October 2008
Kurdish facility could become model for developments country-wide.

The UAE’s Crescent Petroleum is in talks with provincial authorities in Iraq to replicate the gas city it set up in northern Iraq, with further cities to be established in the southern region of Basra and Al-Anbar in the west.

Majid Jafar, executive director of Crescent, says the $3bn Kurdistan gas complex, which aims to attract more than $40bn in long-term investment, is a model that could be rolled out across Iraq.

“There has already been a lot of interest sparked by the example we have set in the north, and we have been approached by local authorities in Basra and Al-Anbar to replicate similar projects that we have done with the gas cities,” says Jafar.

Cost of gas city in Kurdistan$3bn
Long-term investment goal of Kurdistan plant$40bn
Volume of gas from Khor Mor field supplied to Kurdistan plant150 million cf/d
Volume of gas to be supplied to Crescent from Iran’s Salman field500 million cf/d
cf/d=cubic feet a day

While the talks are still at an early stage, they are expected to focus on developing gas supplies in the two provinces for local use.

Crescent hopes to initially focus on power generation, and then to provide gas for local industrial expansion.

“Iraq has, in many areas, only two hours a day of electricity, which is a tragedy,” says Jafar.

“It is flaring more than 1 billion cubic feet a day (cf/d) in the south, and importing billions of dollars worth of liquid fuels, which is just a waste.”

Although the company recently postponed a ceremony to celebrate the opening of its Kurdistan complex, Jafar says that it was only because of timing issues.

“There are some procedural issues to do with land registration,” he says. “But we will be holding the rescheduled event soon.”

The Kurdistan complex involves Crescent and the UAE’s Dana Gas supplying 150 million cubic feet a day (cf/d) of gas from the Khor Mor field in northern Iraq.

The project will supply gas to domestic power generation plants, as well as new gas-intensive industries.

Jafar says Crescent is also still hopeful of agreeing a delayed deal to import gas into the UAE from Iran.

Under the proposed agreement, 500 million cf/d of gas will be supplied from Iran’s Salman field to Crescent (MEED 15:9:08).

Iran blames the delay to the gas agreement on Crescent’s refusal to pay a higher price for the gas, but Jafar says much of the problem is due to National Iranian Oil Company (NIOC) failing to complete the facilities required on time.

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