The Kurdistan regional government in Iraq has approved a project by Dana Gas and its partner Crescent Petroleum to build a gas city on an area of more than seven square kilometres, Dana Gas said yesterday.
The gas city is a joint venture between the Sharjah-based Dana Gas and Crescent Petroleum and will be spread over an area of 461 million sqft (over seven sqkm) in Kurdistan, Dana Gas said.
"The 461 million sqft site for the Kurdistan Gas City has been officially assigned by the Kurdistan Regional Government (KRG), for development by Gas Cities LLC, following extensive surveys that have been completed on potential sites within the Kurdistan Region of Ira," the statement said.
Prime Minister of the Kurdistan regional government of Iraq Nechirvan Barzani will join other ministers, officials and diplomats in a ground breaking opening ceremony for the project on September 21.
The Kurdistan Gas City is a major new sustainable and synergistic gas-utilisation industrial complex to be built over an area of 461 million sqft, designed to promote private sector investment in a variety of gas-related industries to further benefit the country's citizens through mass training, job creation in the many tens of thousands, and the promotion of general economic activity.
It will include industrial, residential and commercial components in an integrated city, with an expected initial investment in the basic infrastructure estimated at $3bn, preparing the land for possession by prospective residents. This initial investment will in turn facilitate further Foreign Direct Investment exceeding $40 billion (Dh147bn) during the operations phase.
The gas city is being structured to hold more than 20 varieties of world scale petrochemical and heavy manufacturing plants, and hundreds of Small and Medium-sized Enterprises, served by state-of-the art civic facilities. "Dana Gas and Crescent Petroleum have made a significant contribution to the Iraqi economy through their work in the Kurdistan region of Iraq thus far, and the new Kurdistan Gas City will be an extension of the considerable and commendable achievements to date," Barzani said.
"We highly appreciate their dedication towards our region and welcome their efforts to support the Iraqi people and the Iraqi economy. Through their professionalism and genuine concern for the community, we are making significant progress in spurring on economic growth and creating opportunity for our people."
Hamid Jafar, Executive Chairman of Dana Gas, said: "The gas city is an enormous step forward in Dana Gas' strategy across the Middle East, North Africa and South Asia (Menasa) region."
The gas city is the first in a series of gas cities that are being developed across Menasa region by gas cities, a joint venture company that has been established by and between Dana Gas and Crescent Petroleum.
The gas city is projected to generate direct and indirect job opportunities for nearly 200,000 Iraqi citizens in infrastructure, industrial projects, support services and other business activities.
Meanwhile, pursuant to the service agreements signed in April 2007 with the Kurdistan regional government, construction is more than 80 per cent complete on 180km of natural gas pipeline and two LPG plants, carried out by Dana Gas and Crescent Petroleum in the Kurdistan to supply, process and transport natural gas to fuel urgently needed local electricity generation.
The project is employing Iraqi contractors, professionals, skilled technicians and labour in phases of construction stages to maximise local content and economic benefit. The entire project is on track for first gas supply of 150 million cubic feet per day in the coming weeks, rising to 300m cubic feet by 2009.
The gas supplied to the two new plants under construction in Erbil and Sulymaniya, will generate 1,250 MW of electricity, and benefit more than four million Iraqi citizens in the Kurdistan and the rest of Iraq. The project involves an investment of $650m – the largest single private sector investment in Iraq for decades.
"As a result of this investment, urgently needed gas will be supplied to plants cost-effectively and also result in savings to the government's budget of more than $2bn annually," Dana said.