Iraq gas project remains on hold

16 November 2016

Operator still in discussions with authorities despite receiving bids

The project to develop the Mansuriya gas field in northeastern Iraq remains on hold despite reports that the main engineering, procurement and construction (EPC) deal was to be awarded this year.

Iraq awarded a 20-year licence to develop the field in 2011 to a consortium led by Turkish Petroleum Corporation (TPAO), but the project has faced significant delays.

“The Mansuriya project in northern Iraq remains on administrative hold,” said a spokesperson from Kuwait Energy, a minority stakeholder in the consortium. ”The consortium, led by its operator TPAO, remains in discussions with the Iraqi authorities to determine the optimal way forward for this project.”

“Once this is in place, the consortium will proceed accordingly. Unfortunately, there is no definitive timeline set for this at the moment,” the spokesperson told MEED.

Kuwait Energy released a statement in August 2014, two months after militants from the jihadist group Islamic State in Iraq and Syria (Isis) swept across northern Iraq, saying the project had been put on hold “until the security situation improves”.

The project looked to have been revived in June 2015, when the consortium invited companies to express interest in bidding on the EPC tender. Technical bids are thought to have been submitted by several companies at the start of 2016.

TPAO is the operator of the project with a 37.5 per cent interest. Other participants include Iraq’s state-owned Oil Exploration Company, with 25 per cent, Kuwait Energy, with 22.25 per cent and Korea Gas Corporation (Kogas), which holds a 15 per cent stake.

The Mansuriya field is located in the Diyala province, 100 kilometres northeast of Baghdad. In the expression of interest (EoI) document issued in June 2015, the consortium said the project would be developed in two phases.

Phase 1 aims to achieve 100 million cubic feet a day (cf/d) of dry gas production, phase 2 will expand the production capacity to 320 million cf/d by 2023.

“The development plan is to reach a planned 100 million cf/d by the second quarter of 2018 based on EPC award in January 2016, subject to security status,” the EoI stated.

Due to the project remaining on administrative hold, phase 1 is now unlikely to be completed until at least 2020 if the project is revived.

In October, Kuwait Energy signed a farm-out agreement to give a share of its Siba gas field contract in Iraq to Egyptian General Petroleum Corporation (EGPC).

EGPC will take a 20 per cent stake in the 20-year gas development and production services contract for the field, which started in 2011, according to a report by news agency Reuters that cited a Kuwait Energy statement.

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