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Kurdistan Warns Gas Company of Deals With Iraq

Iraqi Kurdistan
Iraqi Kurdistan

The Kurdistan regional government's Ministry of Natural Resources has warned the United Arab Emirates-based energy firm Dana Gas against any agreement with the Iraqi government to move the region's natural gas without the regional government's permission.

"According to the contract with Dana Gas, the company is not allowed to transport gas from Kurdistan Regional Government (KRG) fields to any other place without the approval of the Kurdistan Regional Government," the ministry said in a statement on Monday.

The warning statement came on Nov. 6, less than a day after the Iraqi Oil Ministry said it had completed the construction of a 1,050-meter gas pipeline to transport gas from the Khor Mor field in Chamchamal District of the KRG to the disputed province of Kirkuk.

The ministry said the project could ensure the transfer from the Khor Mor field of 100 million cubic feet of gas a day to feed Kirkuk's power station and increase the production of electricity.

"The company made sure to implement the directions of the deputy prime minister for energy affairs and the minister of oil in supporting the projects of supply and transport of petroleum products to operate power production plants in all governorates," said the Iraq's Oil Ministry.

Shipments expected to complicate relations

The announced gas shipments, if carried out, are expected to further complicate energy relations between the Kurdistan and Iraqi governments.

The autonomous Kurdistan Region has for about nine years exported nearly half a million barrels of oil per day to international markets via Turkey despite Baghdad's stark objections. That changed in late March when Turkey halted the Kurdish exports after losing to Iraq in a legal case in the International Chamber of Commerce about a bilateral agreement between the two entities.

Despite the setback, Kurdish leaders insist on playing a role in international energy supply, given the region's abundant natural reserves. With the war between Russia and Ukraine increasing concerns about Europe's gas supply, the Kurds see a renewed opportunity.

According to the KRG, the Kurdish region could hold as much as 5.67 trillion cubic meters of natural gas reserves, which amounts to around 3% of the world's total reserves, positioning the region for a potentially prominent role in regional and global gas markets.

That Kurdish ambition, however, could be challenged by the Iraqi state, which has been pushing for a stronger central government, especially after the Kurdish 2017 referendum for independence.

Dana Gas did not immediately respond to VOA's request for comment on the pipeline.

Speaking on the condition of anonymity, a source from Iraq's Oil Ministry told VOA that "all preparations have been made" to begin the transports.

"But details such as prices and other things may not have been fully agreed upon yet," the source said.

Some wary of deal

Within the KRG, the effort has been viewed with suspicion from the ruling Kurdistan Democratic Party (KDP), which says the deal between the Iraqi Oil Ministry and Dana Gas must have had at least the blessings of the Patriotic Union of Kurdistan (PUK), which controls Chamchamal District.

"The Khor Mor gas field is under the control of the PUK. Any agreement with Iraq to transport gas from the field to Kirkuk must be known to the PUK," Rebwar Talabani, the former chairman of the Kirkuk Provincial Council, told VOA.

PUK spokesperson Saadi Ahmad Pira rejected those claims.

"This issue was discussed in today's meeting between the PUK and the KDP. The PUK and the KDP are not aware of the agreement, and this issue is related to the Kurdistan Regional Government," Pira told VOA.

Dana Gas currently extracts about 14 million cubic meters of gas per day from Kurdistan, which is used to provide the Kurdistan region's domestic energy needs. The gas field has been a common target of Iran-backed Shiite militias, especially when KRG tensions with Baghdad and Tehran intensify.

This story originated in VOA's Kurdish Service.