Kurdistan Gas Sector Gains Momentum As Dana Gas And Crescent Petroleum Sign Chemchemal Gas Sales Agreements

Dana Gas, Crescent Petroleum and partners in Pearl Petroleum are entering new Gas Sales Agreements to deliver major volumes of natural gas from the Chemchemal field to industrial buyers in the Kurdistan Region of Iraq, with supply expected to start in the second half of 2027 and continue for a decade.

Under these GSAs, cement and steel factories in the Kurdistan Region of Iraq will jointly secure up to 142 million standard cubic feet of natural gas per day for ten years, with fuel aimed at replacing heavy fuel oil and supporting long-term industrial output once Chemchemal production begins.

The Chemchemal field is being developed with new private-sector pipelines planned to move gas to users in Erbil and Bazian, including a 40-kilometre dedicated line linking Chemchemal directly to plants in the Bazian industrial zone, which is a major hub for cement production in Sulaymaniyah province.

The GSAs cover Mass Cement, Bazian Cement, Delta Cement, Gasin Cement and Sulaimani Cement in the Bazian area, as well as Van Steel Company in Erbil governorate, giving these companies long-term Kurdistan Region of Iraq gas supply security and a cleaner fuel source for their energy-intensive operations.

To unlock Chemchemal’s gas, Pearl Petroleum partners announce a US$160 million work programme that includes drilling three wells, setting up an extended well test facility and building supporting infrastructure, with early appraisal of the Cretaceous reservoir already under way to prepare for a future full-field development phase.

Earlier, in early October 2025, Dana Gas and Crescent Petroleum completed the Khor Mor 250 expansion in the Kurdistan Region of Iraq, adding 250 million standard cubic feet per day of extra processing capacity, plus 460 metric tonnes per day of LPG and 7,000 barrels per day of condensate, lifting total capacity at Khor Mor to 750 million standard cubic feet per day, a 50 percent increase.

The main figures for current Kurdistan Region of Iraq gas operations and investments are summarised below.

The expanded Khor Mor gas plant now fuels more than 80 percent of electricity generation in the Kurdistan Region of Iraq, providing relatively low-cost power to over six million people in the region and other parts of Iraq, while total investment exceeding US$3.5 billion has supported around 20,000 direct and indirect jobs, with further employment expected as new projects move ahead.

Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, said, "These agreements mark a significant milestone in the development of the KRI’s energy infrastructure, delivering considerable supplies of clean burning natural gas to empower growth in the region’s industry and help displace the use of dirtier, more expensive heavy fuel oils. The milestone underscores the exciting new chapter for the Pearl Petroleum consortium, combining the recent completion of the KM-250 expansion project in October 2025, the appraisal and development of the Chemchemal Field, and other development plans that will considerably enhance the energy sector and economy of the Kurdistan Region and the rest of Iraq."

Jafar’s comments link the new Kurdistan Region of Iraq gas sales to wider plans around Khor Mor and Chemchemal, stressing that the consortium views the long-term supply of natural gas as central to supporting electricity, industry and economic activity across both the KRI and the rest of Iraq.

Richard Hall, Chief Executive Officer, Dana Gas, commented, "This agreement supports the growing energy needs of the Kurdistan Region of Iraq and strengthens the role of natural gas as a fuel source for its industrial base. By supplying competitive, lower-emission gas to the Bazian industrial corridor, we are helping replace polluting heavy fuel oil, reduce emissions and improve energy efficiency for key industries."

He added, "Beyond energy supply, this agreement supports industrial growth, local employment and long-term economic activity in the communities surrounding the Bazian corridor."

Together, the Chemchemal GSAs, the KM250 expansion and the broader Kurdistan Region of Iraq gas investments show an integrated approach to meeting industrial demand, lowering emissions relative to heavy fuel oil and building energy infrastructure that can support factories, jobs and power generation over many years.

With inputs from WAM