(Photo Credit: Azad Lashkari/Reuters)
Several missile attacks on a gas field in the Iraqi Kurdistan Region (IKR) prompted US contractors working on the field’s expansion project to leave, spreading frustration in the region about increasing its revenue and offering a slight alternative to Russian gas.
Reuters published an exclusive story on 30 August claiming the Khor Mor field expansion project was suspended at the end of June following three missile attacks. The project is operated by Pearl Petroleum, owned mainly by Abu Dhabi’s Dana Gas and its affiliate, Crescent Petroleum.
IKR government sources said that workers from Exterran Corp of Texas resumed work last month. However, two more missiles struck the site on 25 July, forcing the company to leave again without setting a return date.
The UK-based agency said that no severe damage was caused by the attacks, as current operations were not halted. However, the expansion project, which includes building a new pipeline to Turkey at a later stage, has been suspended until the region is safe.
Khor Mor is one of the largest gas fields in Iraq, and the plan to expand it aimed to boost production in the face of a massive need to generate electricity and end daily blackouts.
It also aims to export gas to Turkey and Europe once the local market’s needs are met. The project is partially funded through a $250 million agreement with the US International Development Finance Corporation.
Exterran Corp became the third company to suspend operations since attacks began targeting the field on 21 June, after two Turkish sub-companies, Havatek and Biltek, had already suspended operations.
The Khor Mor is located near a buffer zone between the Iraqi army, Kurdish forces, and Shia militias, from which the first rocket attacks were launched.
Earlier in May, an unidentified missile attack launched from Nineveh province targeted an oil refinery in Erbil, causing only material damage.
Due to the lack of cooperation, Reuters reported some areas where neither the Iraqi army nor the Kurdish forces can enter, leaving a security gap that allows armed militias to operate freely.
“Khor Mor has many capabilities for the Kurds. We are under attack from all sides. The future is not entirely clear,” a Kurdish official told Reuters.
The setback for gas plans comes when the oil sector, the region’s financial lifeline, is also in trouble.
Industry and government sources said Exterran Corp had suspended operations for security reasons, and not due to the ruling.
Reuters said that any further delay in investing in the sector would significantly impact the Kurdistan Regional Government, which is facing an economic crisis in an already unstable region due to the instability in Iraq.