Foreign companies stop expansion work at the Khor Mor gas field

Due to security concerns, a Canada-based global engineering company and its Turkish subcontractor have decided to withdraw staff and temporarily suspend operations at the Khor Mor gas field expansion project in Iraq’s Kurdistan Region. This decision comes in the wake of a recent drone attack, according to exclusive information from The new Arab from two credible sources.

The unfortunate incident occurred late on April 26 and resulted in the loss of four Yemeni nationals and the injury of two others when a suicide drone hit the Khor Mor gas field in Sulaimaniyah Province in the Kurdistan Autonomous Region of Iraq.

The Khor Mor gas field is significant as it is being developed by the Dana Gas company from the United Arab Emirates. Natural gas supplies electricity to almost 80 percent of the Kurdistan Region’s power plants. According to local electricity authorities, the disruption caused by the drone strike resulted in a loss of 2,500 megawatts of electricity.

This setback comes at a crucial time as Dana Gas secured $250 million in financing from the US International Development Finance Corporation in September 2021 to expand gas production at the Khor Mor plant. The expansion project, known as KM 250, was expected to increase gas production to 700 million standard cubic feet per day (MMscf/d) by April 2023, with completion scheduled for the second half of 2024. However, the cessation of operations poses a challenge in meeting this schedule.

A Kurdish source who spoke on condition of anonymity revealed TNA that Enerflex, which is overseeing the KM 250 expansion project, withdrew all of its staff and suspended operations following the drone attack. This action follows the withdrawal of almost 3,000 workers by Turkish subcontractor Biltek.

Attempts to obtain comments from Dana Gas and Biltek on this situation were unsuccessful at the time of publication of this report.

However, the source said both companies are closely monitoring the security situation and aim to resume operations as soon as conditions improve. However, the exact timeline for resumption of operations remains uncertain.

While the expansion project itself was not directly affected by the drone attack, a nearby gas collection facility suffered the impact. Consequently, there may be delays in the completion of the project due to the suspension of operations.

Iraqi security forces have set up an investigative committee to investigate the incident and are committed to holding the perpetrators accountable. However, so far there are no conclusive results. In addition, the Kurdistan Regional Government (KRG) is conducting its own investigation, said a Kurdish official who spoke on condition of anonymity TNA. The KRG has accused armed groups linked to the Iraqi Popular Mobilization Forces (PMF) of being involved in the attack.

While the region awaits further developments, the focus remains on ensuring the safety of personnel and infrastructure involved in the vital Khor-Mor gas field expansion project.