Genel to Set Up JV to Send Iraqi Gas to Turkey and Beyond
Genel Energy, the Anglo-Turkish listed oil producer in Iraq's northern province, has announced its plans to set-up a joint venture to develop a gas field in the region to export natural gas to Turkey.
"With this JV [joint venture] and other companies production, KRG will able to post more than 20BCM [billion cubic metres] of gas to the Turkish market, and beyond Europe, by early 2020," Tony Hayward, chairman of Genel Energy said.
In a speech he made during the Atlantic Council Energy & Economic Summit in Istanbul, Mr. Hayward said that the new joint venture with the Kurdistan Regional Government (KRG) will become operational by the end of 2016. He also said that 10BCM of gas will be exported from Genel's Miran and Bina Bawi sites. The venture will be based on a build, operate, and transfer contract.
Mr. Hayward has previously signalled that there may be a possibility that gas could come from Kurdistan to Europe.
"With time, who knows, we may see the molecules of Kurdistan regional natural gas coming to Europe in the coming future," Mr. Hayward said in an interview with Natural Gas Europe at the Atlantic Council Summit in 2014.
"We're planning to export 10BCM to Turkey in coming 2 years, but it could suffer a delay to 2019," Iraqi KRG Energy Minister Ashti Hawrami said at the same conference in 2014. He also said that salary payments to government workers will be made regularly in 2016, after a three-month lag.
Additionally he said that the debt stock will be reduced significantly in 2016 by the help of increasing oil production and asset sales. The KRG still owes $3 billion to its 2014 lenders, and could not make its payments regularly.
In December 2014, KRG ended its long-running dispute with Iraq's central government over the sale of crude from its fields and the distribution of federal budget revenues. But the deal unravelled almost immediately in early 2015. Between January and June, it transferred around $2 billion in total to Erbil--less than 40% of the amount the Kurds had expected.
Independent oil sales have been allowing the KRG to generate some $800-850 million a month from July to enable it to pay salaries and ongoing costs to oil companies like Genel.