By John Lee.
Genel Energy and DNO International have signed a Gas Sales and Purchase Agreement with the Kurdistan Regional Government to supply gas from the Summail field in the Dohuk licence in the Kurdistan Region of Iraq.
The gas will partially displace diesel currently used to generate electricity in a 500 MW power plant in the city of Dohuk (pictured), located 40 kilometres from the field.
Initial deliveries will be around 100 million cubic feet per day sold on a take-or-pay basis for the duration of the Production Sharing Contract or until deliveries reach one trillion cubic feet. The price of gas will range between $3 and $4 per thousand cubic feet over the life of the contract.
The Prime Minister of the Kurdistan Regional Government, Nechirvan Barzani, and the Minister of Natural Resources, Dr. Ashti Hawrami, were present at the signing ceremony held in Erbil today and are signatories to the contract.
The next step in the fast-track development of the field is re-entry and completion of the Summail-1 discovery well and the installation of a 24 inch pipeline to transport gas to what is slated to become the regional gas gathering and distribution network. First gas from Summail-1 is planned in January 2014. The second well, Summail-2, will spud in the fourth quarter and the Summail-3 well is scheduled for 2014.
Following the development of the Summail field, the focus will shift to the appraisal of the oil potential of the Dohuk license.