The development of the world-class Miran and Bina Bawi fields is set to unlock significant value for both Genel and the KRG, assisting the Kurdistan Regional Government in satisfying domestic gas demand and its obligations under the KRG-Turkey Gas Sales Agreement.
The development of the fields is a unique opportunity, and promises to deliver significant value for shareholders. The fields are 300 km from Turkey, one of the world’s fastest growing major gas markets with expected demand growth of 3% per year until 2020 at least. Turkish gas demand makes the KRI’s gas reserves of far greater strategic importance than oil, and they provide Turkey with the opportunity of materially reducing their gas import costs.
Turkey currently consumes approximately 50 bcma of gas, of which more than half is provided by Russia. With the KRG set to provide 20 bcma, this gas will help to diversify, and indeed form the baseload of Turkish supply, at a cheaper price than all current imports.
The project is underpinned by the KRI-Turkey Gas Sales Agreement, and the development is now progressing on the ground in Turkey, with BOTAS having begun its tendering process for the construction of the Turkish stretch of the pipeline.
It is a world-class development with a committed government buyer for the gas in place.
The pre-Front End Engineering Design (‘FEED’), carried out by Fluor, and the Gas Development Plan, carried out by Baker Hughes, for both Miran and Bina Bawi are expected to complete in Q1 2017.
In February 2017, the Company announced that it had finalised Amended and Restated Production Sharing Contacts and Gas Lifting Agreements for the Miran and Bina Bawi fields.
This was an important milestone, allowing Genel to focus on the next step of concluding negotiations with potential partners, which will be the catalyst for pre-development activity to start in earnest in order to move the KRI gas project towards FID.
Genel’s focus in 2017 is the positive conclusion of discussions with a strategic partner for the project, followed by a completion of the midstream agreement and financing of the gas processing facility.
The development of the Miran and Bina Bawi assets has the potential to be transformational for Genel, and the Company is focused on demonstrating the value proposition to the industry and market. Genel has been central to the Kurdistan Region of Iraq’s development as an oil province, and we now look forward to playing the same role in the development of gas exports which will provide a huge boost to the KRG’s economy.