UAE to double investment in KurdistanUAE to double investment in Kurdistan to $6bn
Tom Arnold
- Last Updated: May 20. 2010 12:00AM UAE / May 19. 2010 8:00PM GMT
LPG plant components being transported to asite in Kurdistan. Courtesy Dana
ERBIL // Investment from the UAE in Iraqi Kurdistan is expected todouble to US$6 billion (Dh22.03bn) within three years as the region’svast gasfields attract a wave of foreign capital.
Abu DhabiNational Energy Company, or Taqa, is among the companies consideringinvestments in the power sector.
Carl Sheldon, the general manager of Taqa, said: “As the economygrows and Iraq stabilises it is a natural country for Taqa to invest in.Particularly on the power and water side, the needs are tremendous.”
Taqarepresentatives are part of a delegation of government and businessofficials from the UAE visiting Iraqi Kurdistan to look into investmentopportunities.
The region is estimated to have 200 trillion cubicfeet of natural gas, as well as oil reserves amounting to 45 billionbarrels.
Investment in the region from the UAE is expected to reach about $3bnthis year, but that could rise to $6bn within three years, according toSinan Celebi, the minister of trade and industry in the Kurdistanregional government.
Dana Gas, based in Sharjah, already hasoperations in Iraqi Kurdistan and is in a partnership that is developinga large gasfield that is supplying fuel for regional electricitygeneration.
The group has recently completed construction of a gas processingplant that is expected to contribute substantially to the profitabilityof the venture, in which Dana holds a 40 per cent interest.
“Weare increasing production and have completed train one of thefacilities,” Ahmed al Arbeed, the chief executive of Dana Gas, said inan interview yesterday.
“We are producing 150 million standardcubic feet per day and about 6,500 barrels of condensate. We are in theprocess of increasing that to 200 million standard cubic feet per day bythe end of this year.
“We will also produce LPG after a couple of months. We expect toreach a level of 500 metric tonnes per day. We have another train tocomplete, probably next year, which will increase production.”
Yearsof war and under-investment have left Iraq with a dilapidated powernetwork, despite the country’s huge untapped oil and gas reserves.
TheBaghdad government is expected to start handing out oil and gaslicences in September as planned, said Ashti Hawrami, the minister ofnatural resources in Iraqi Kurdistan.
Iraq’s government this week approved an agreement between the oilministry and the majority-Kurdish region in the country’s north toexport crude produced there, opening the way for shipments to resumeafter months of delay. The country is also expected to supply theNabucco gas pipeline, which is intended to reduce Europe’s dependence onRussian fuel.
Mr Hawrami said: “This is a temporary arrangementand a final agreement is needed. Iraq needs a resolution to agreerevenue shares and hydrocarbon legislation, and we hope that thegovernment will deal with this quickly.”
Mr al Arbeed said the pipeline project would be good for the Gulf.“Nabucco is in the interests of the region and will add value to theregion and companies involved,” he said.
Construction on the$9.7bn Nabucco project is expected to begin next year.
Iraq,which holds the third-largest oil reserves in the world, hopes todevelop gas production to feed new power plants. The country’s oilministry auctioned development rights for the Akkas and Mansouriyagasfields last year but did not receive any offers.
Akkas, Mansouriya and a third gasfield in Siba are expected to bepart of a third bidding round.