Russian oil major Rosneft will invest in gas pipelines in Iraq’s Kurdistan, expanding its commitment to the region ahead of its independence vote to help it become a major exporter of gas to Turkey and Europe.
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Kurdistan has been exporting oil independently from the central government in Baghdad since 2014 and Kremlin-controlled Rosneft joined the list of buyers this year, lending the semi-autonomous region hundreds of millions of dollars in loans guaranteed by future oil sales.
Now Rosneft is widening its investments to gas by agreeing to fund a natural gas pipeline in Kurdistan.
The investments are believed to amount to more than US$1 billion (£735.35 million).
Kurdistan is holding an independence vote on 25 September as it seeks to part ways from Baghdad after years of disputes over budget revenues and the sharing of oil exports.
Erbil, the seat of the Kurdistan Regional Government (KRG) in northern Iraq, needs money to fund the fight against Islamic state and a budget crisis caused by low oil prices.
The arrival of Rosneft will speed up gas development, which has so far largely been driven by mid-sized companies.
The pipeline’s capacity is expected to handle up to 30 billion m3 of gas exports a year, in addition to supplying domestic users. Kurdistan sits on some of the largest untapped gas deposits on Europe’s doorstep.
The pipeline will be constructed in 2019 for Kurdish domestic use, with exports due to begin in 2020.
The volumes that Rosneft wants to help Kurdistan supply to export markets are big - they represent 6% of total European gas demand and one-sixth of current gas export volumes by Russia - by far the largest supplier of gas to Europe.
Read the article online at: https://www.worldpipelines.com/project-news/18092017/rosneft-to-invest-in-gas-pipelines-in-kurdistan/