Genel Energy and DNO International sign Kurdistan gas sales and purchase agreement

Genel Energy and DNO International have signed a gas sales and purchase agreement with the Kurdistan regional government to distribute gas from the Summail field in the Dohuk licence.

The partnership will deliver around 100 million cubic feet a day during the production sharing contract period or until supply reaches one trillion cubic feet. The gas will partially replace diesel, which is currently being used for electricity generation in a 500MW power plant in Dohuk.

The partnership also plans to complete development of the Summail-1 discovery well and install a 24in pipeline to supply gas to the regional gas-gathering and distribution network

Genel is expecting first gas from Summail-1 in January 2014. It also plans to spud Summail-2 and Summail-3 in 2014.

Genel Energy chief executive Tony Hayward said: "The signing of the first domestic gas sales agreement in Kurdistan is a significant milestone in the development of the gas industry in the Kurdistan Region of Iraq, and the first step in Genel’s gas monetisation strategy, an important value driver for the business going forward."

Genel Energy and DNO International each hold a 40% stake in the Dohuk licence. The Kurdistan regional government carries the remaining 20% interest.