SULAIMANI (ESTA) — The UAE energy firm Dana Gas said on Sunday it is still in talks with the Iraqi government and other potential buyers for a gas sales agreement for its second train, as Baghdad seeks to lower reliance on Iranian energy imports.
CEO Patrick Allman-Ward said Dana Gas, which is part of the Pearl Consortium expanding the Khor Mor gas field in the Kurdistan Region, was in talks with other parties, including Turkish and Kurdish buyers, for a sales gas agreement for the second phase of the expansion, according to S&P Global.
“We are of course looking to sign a sales gas agreement for the second train, the KM 500,” S&P Global quoted him as saying.
“We continue to engage with relevant counterparties both Turkish and the federal government and actually also in Kurdistan Region itself as well,” he added.
Iraq buys gas and electricity from Iran to supply about a third of its power sector, worn down by years of conflict and poor maintenance and unable to meet the needs of the country’s 40 million population.
The United States has insisted that oil-rich Iraq, OPEC’s second-largest producer, move towards self-sufficiency as a condition for its exemption for importing Iranian energy. Iraq relies heavily on Iranian gas to feed several power stations.
Since 2018, Washington has granted waivers to Iraq, allowing it to continue importing Iranian gas and electricity. The United States gave Iraq 120 days in March to reduce its energy dependence on Iran.
Iran has demanded nearly $6 billion in unpaid gas bills from Baghdad, recently reducing its supply to Iraq over arrears.
While American exemptions allow Iraq to obtain supplies from its neighbor without risk of reprisals, they still prevent it from paying its Iranian bills in dollars.
Abu Dhabi-listed Dana Gas has a 35% stake in the Pearl Consortium, which mainly produces gas and associated liquids from the Khor Mor and Chamchamal fields in the Kurdistan Region.
Dana Gas’ Q1 production from the Kurdistan Region rose 9% year-on-year to 35,000 boe/dm helping to boost company output to 64,900 boe/d, a 2% increase from the year-earlier period, according to S&P Global.
Higher production from the Region helped the company’s Q1 net profit surge 41% year-on-year to $24 million.
