Khor Mor Gas Plant Expansion

The Khor Mor gas plant, located in the Kurdistan Region of Iraq, has been operational since the Khor Mor gas field commenced production in October 2008. Its capacity is being increased to 690 million cubic feet a day (Mcfd) by adding a new 250Mcfd gas train under an expansion project called KM-250.

Construction works on the £456.2m ($630m) gas plant expansion project had started in the fourth quarter of 2018, but were suspended in March 2020 due to the Covid-19 pandemic.

With onsite construction resumed in April 2021 and the funding secured in September 2021, the KM-250 gas expansion project is now on track to commence operations in April 2023.

Pearl Petroleum is the owner and operator of the Khor Mor integrated gas treatment and liquified petroleum gas (LPG) extraction facility, along with the Khor Mor gas field.

Pearl Petroleum is a consortium of five oil and gas companies, with Dana Gas (35%) and Crescent Petroleum (35%) being the majority shareholders, while OMV, MOL and RWE hold 10% each. OMW is based in Austria, while MOL is based in Hungary and RWE is based in Germany.

Khor Mor is the biggest private sector upstream gas operation in Iraq with a cumulative production of more than 341 million barrels of oil equivalent (Mboe) as of September 2021, while Pearl Petroleum’s total investment on the project exceeded £1.5bn ($2.1bn).

Financing for Iraq’s KM-250 gas expansion project

The US International Development Finance Corporation (DFC), a development finance arm of the US Federal Government, agreed to provide a £181m ($250m) loan to Pearl Petroleum for the 250Mcfd gas plant expansion in September 2021.

It followed DFC’s signing of a memorandum of understanding (MOU) with the Government of Iraq for supporting private sector investment in Iraq in August 2020. DFC aims to invest £758m ($1bn) in private sector projects in Iraq over four years.

The remaining financing for the KM-250 gas expansion project was previously arranged through a regional bank facility and the engineering, procurement, and construction (EPC) contractor.

Khor Mor gas facility location and site details

The Khor Mor gas processing complex is located near Khor Mor village, Sulaymaniyah Governorate, in the Kurdistan Region of Iraq, approximately 50km south-east of Kirkuk.

Pearl Petroleum holds an overall fence area of 600ha at the site. The new gas plant is being constructed on a 50ha-site adjacent to the existing facility.

Khor Mor gas plant expansion details

Apart from building a new gas processing plant, as many as five new flowlines are being laid to transport raw gas from the Khor Mor production wells to the plant.

The new plant will have gas dehydration, desulphurisation, mercury removal, fractionation and compression facilities.

The processed gas will be exported through an existing 180km-long, 24in-diameter gas pipeline to the Erbil, Chemchemal and Bazian power stations, while the LPG and condensate will be transported by trucks.

The KM-250 project constitutes stage one of a bigger expansion plan to ramp up gas production from Khor Mor to exceed one billion cubic feet a day (Bcfd) by adding one more train at the existing facility by 2024.

Existing Khor Mor gas processing facility details

The Khor Mor gas processing complex, which receives feed gas from six production wells of the Khor Mor gas field, comprises an early production facility (EPF) of 120Mcfd capacity, the main gas plant capable of processing more than 300Mcf of gas a day, and two parallel LPG extraction trains.

The gas complex also houses condensate stabilisation and storage facilities with a nominal export capacity of 16,000 barrels per day (bpd), as well as LPG storage tanks and a truck loading station of 1,020 tonnes per day (tpd) nominal capacity.

While the EPF commenced operations with an initial capacity of 85Mcfd in October 2008, the remaining facilities were constructed between 2007 and 2011.

The total production capacity of the gas plant was increased by 45% to 106,000 barrels of oil equivalent a day (boed) through facility optimisation between 2018 and 2021. It involved the EPF debottlenecking project completed in October 2018 and a plant bypass project completed in August 2020.

Gas offtake from the Khor Mor plant expansion

Pearl Petroleum signed a 20-year gas sales agreement with the Kurdistan Regional Government for 250Mcf of gas output a day from the Khor Mor gas expansion project in February 2019.

Pearl Petroleum had signed a ten-year gas sales agreement with the Kurdistan Regional Government for 100Mcfd of additional gas produced from the gas plant debottlenecking project in January 2018.

Contractors involved in Khor Mor gas plant expansion

Exterran, a company specialising in natural gas compression equipment and related services and based in Houston, US, is engaged as a key contractor in the KM-250 gas expansion project.

Hatch, a consulting engineering firm based in Canada, bagged the front-end engineering and design (FEED) contract for the gas plant expansion.