Russia’s Rosneft plans to expand its footprint in Iraq’s Kurdistan region after agreeing to fund a gas pipeline.
The agreement, whose value was not disclosed, is expected to be finalised by year-end. The statement said Rosneft and the KRG had finished inspecting Kurdistan’s oil export pipelines and Rosneft would soon complete developing final documents for the expansion project.
For Kurdistan, the gas pipeline will support supply to power plants and domestic factories through the region, but also allow export of substantial fuel volume to Turkey and Europe in coming years.
The pipeline’s capacity is expected to handle up to 30 billion cubic meters (bcm) 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.
“Successful implementation of the project... will enable Rosneft to play a leading role in the building and expanding Kurdistan Region’s gas transport infrastructure and create synergy with existing projects for development of the oil and gas fields of the five blocks awarded to the company,” Rosneft said.
Rosneft secured a deal to develop five fields and has also agreed to help the region expand its oil pipeline infrastructure through which crude is exported via Turkey to global markets.
Kurdistan is seeking to boost oil exports to one million barrels per day (bpd) by the end of this decade from the current 0.65 million bpd.