Kazakh-South Korean-Iraq gas deal to be signed Thursday

February 21. Central Asia Newswire

Kazakh-South Korean-Iraq gas deal to be signed ThursdayIraq’s oil ministry said it will pen an initial agreement Thursday with Kazakhstan state-owned energy giant KazMunaiGas (KMG) and a Korean gas corporation to develop an Iraqi gas field in the western Anbar province.

“After initialing the contract we will send it to the cabinet for final approval,” the Reuters news agency reported an oil ministry official as saying Monday.

The Kazakh fuel producer and Korea Gas Corp, known as Kogas, won an auction to develop the Akkas gas field in October.

The three had initially planned to sign the deal on November 14, but their ceremony was postponed when local authorities in Anbar province – a former Al-Qaeda refuge – opposed the negotiations.

Anbar officials said their province might not benefit from the deal, which the two energy majors were making with Baghdad.

But the oil official, Sabah Abdul Kadhim, told Reuters the conflict has now been resolved.

“The oil ministry met with Anbar local officials to submit clarifications for the deal and all misunderstandings were resolved.

Now Anbar provincial authorities are happy and promised to show support and cooperation for the companies that will develop the Akkas gas field,” said Kadhim, a lawyer for Iraq’s Petroleum Contracts and Licensing Directorate.

The 50-50 venture between KazMunaiGas and Kogas expected to produce over 11 million cubic meters of gas a day, at a price of $5.50 per barrel of oil equivalent.

Discovered in 1998, Akkas holds 5.6 trillion cubic feet of gas reserves in three fields.

The auction was Iraq’s third since the U.S.-led invasion of 2003 as it seeks foreign investors after years of conflict and sanctions.