Dana Gas, Crescent Petroleum Begin Gas Supplies to Kirkuk; KRG Says Move Was Unauthorized

Peregraf - Dana Gas and Crescent Petroleum announced on August 4 that they have begun supplying natural gas from the Khor Mor field in the Kurdistan Region to Iraq's Ministry of Electricity for use at the Kirkuk Taza power station, a move the companies described as a milestone in their expansion plans. Two days later, on August 6, the Kurdistan Regional Government's Ministry of Natural Resources issued a statement rejecting the companies' announcement and accusing them of acting unilaterally, without KRG approval and in breach of their operating contract.

According to press releases from Dana Gas and Crescent Petroleum, the two companies, as joint operators of the Kurdistan Gas Project, will deliver 100 million standard cubic feet of gas per day from the Khor Mor gas processing facility to the Kirkuk Taza power station, under an agreement the companies say was signed with Iraq's Ministry of Electricity in December 2025. The supply deal runs for an initial term of one year. The companies said the deliveries follow the completion of the KM250 expansion project, commissioned in October 2025, which raised Khor Mor's production capacity by 50 percent to 750 million standard cubic feet per day.

Dana Gas CEO Richard Hall said the agreement "marks a significant step" as the company begins to realize the benefits of its expansion program, and said the additional capacity "lays the foundation for more cooperation on energy within Iraq's growing market" and strengthens energy security. Khor Mor remains Iraq's largest non-associated gas project and supplies fuel for more than 80 percent of electricity generation in the Kurdistan Region, according to Dana Gas.

The KRG's Ministry of Natural Resources, in its August 6 statement, said the KRG first learned of the gas deliveries to Kirkuk only when the companies made their public announcement. The statement said the KRG, as a constitutional and inseparable part of the Iraqi federal republic, has always supported strengthening energy security across the Kurdistan Region and Iraq, and said it has never opposed supplying gas or electricity to any part of Iraq — provided such arrangements fully comply with the operating contract framework and have KRG approval as the contracting party.

The statement said the companies' unilateral decision to begin gas deliveries without KRG consent, and outside the contractual framework governing the Khor Mor project, constitutes a breach of contract and unwarranted interference in the institutional arrangements governing relations between the KRG and the federal government. It said the KRG has repeatedly requested additional natural gas for its own power stations, which need greater volumes of gas to supply electricity to the Kurdistan Region and other parts of Iraq, but that instead of coordinating with the KRG toward that goal, Crescent Petroleum and Dana Gas unilaterally decided on deliveries that do not serve that objective.

The ministry's statement also directly rejected the companies' official announcement, in which the companies thanked the KRG for supporting the gas delivery arrangements. The KRG said it neither approved nor authorized the move, and that any suggestion it backed or supported the operators' unilateral decision is inaccurate and misleading.

The KRG said it is now assessing the legal, contractual, and operational implications of the companies' actions and will take all appropriate measures to protect its contractual rights, safeguard the framework governing the Khor Mor project, and protect the interests of the people of the Kurdistan Region and Iraq in the energy sector. The statement said the KRG will continue working with the federal government to increase gas and electricity production through channels that are mutually agreed, contractually sound, and in the interest of the public.

Separately, according to a report by AGBI, the US Energy Information Administration estimates Iraq's natural gas imports from Iran account for more than 30 percent of the country's electricity generation, and Iraq approved plans in August 2025 to build power plants capable of generating more than 10,000 megawatts in order to reduce that reliance.

Dana Gas and Crescent Petroleum have not publicly responded to the KRG's August 6 statement as of this writing.