The Kurdistan Regional Government (KRG) has signed its first gas purchase agreement with Norway’s DNO International and UK/Turkish joint venture Genel Energy for gas supplies from the Summail field.

The first gas supplies are expected in 2014, feeding the 500MW Dohuk power plant, located 40 kilometres away, and displacing the diesel currently used as feedstock for power generation, according to a 18 September company statement.

Initial deliveries will be about 100 million cubic feet a day (cf/d) sold on a take-or-pay basis for the duration of the production sharing contract or until deliveries reach 1 trillion cubic feet.

As the first gas sales and purchase agreement signed by the KRG, the deal sets a baseline for future contracts. The gas ranges between $3-4 a thousand cubic feet over the life of the contract.

DNO is fast-tracking the development of the field by re-entering and completing the Summail-1 discovery well.  Summail-2 is planned to be drilled before the end of 2013 and Summail-3 is scheduled for 2014. The development also calls for the installation of a 24-inch pipeline, which will eventually form part of the region’s gas gathering and distribution network. The first gas from the Summail-1 well is planned for January 2014

DNO holds a 40 per cent interest in the Dohuk licence and acts as its operator. Genel Energy holds another 40 per cent, while the KRG owns the remaining 20 per cent.