Genel Energy, DNO Signs a Gas Supply Agreement with Iraq's Kurdistan Region

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Anglo-Turkish energy company Genel Energy (LSE:GENL) (Jersey, Channel Islands) and DNO International (OS:DNO) (Oslo, Norway) signed a gas sale agreement with Iraq's Kurdistan regional government (KRG). The KRG said that the agreement will allow the KRG to begin to supply gas to feed a 500-megawatt power station in the Dohuk province in the Kurdish region.

The agreement includes the construction of a 50-kilometer pipeline to deliver gas to the plant. Kurdish Prime Minister Nechirvan Barzani and DNO Executive Chairman Bijan Mossavar-Rahmani signed the agreement in Erbil, the capital of the Kurdistan region.

In a statement, DNO said that the deliveries will begin with 100 million cubic feet of gas per day. The prices will range between $3 and $4 per thousand cubic feet over the life of the contract. DNO will supply the gas from the Summail field in the Dohuk province, which it is developing with Genel Energy. The first gas from the Summail field is planned for January, DNO said. Genel Energy holds a 40% interest in the Dohuk license, and DNO holds a 40% operated interest, while the KRG holds the remaining 20%.

Genel's Chief Executive Officer Tony Hayward said in July 31 that the company saw success in proving up gas reserves at the Bina Bawi and Miran fields in the Kurdistan region. The company said that the two fields had mean gross recoverable resources of 8 trillion to 14 trillion cubic feet, which provided "a strong foundation to build a highly attractive gas business for the long term."

In the long run, the KRG wants to export its natural gas via pipeline to Turkey, which may result in a 10 billion-cubic-meter-per-year export. Currently, Turkey cannot import natural gas from KRG. Each year, Turkey's natural gas import bill is about $30 billion.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.