Dana Gas, a key player in the development of the Khor Mor gas field in Iraq’s Kurdistan Region, has terminated its contract with Enerflex Ltd due to performance issues causing significant delays in the US$806 million KM250 project. The project aims to increase gas production by 250 MMSCF/day to meet energy needs in the region.
Enerflex contests the termination, attributing delays to security concerns following a drone attack in April 2024. The attack led to a loss of 2,500 megawatts of electricity, highlighting the region’s vulnerability to security threats.
While 75% of the project is complete, Enerflex has yet to resume operations due to security risks posed by Iranian-backed militias. The dispute poses financial risks for Enerflex and jeopardizes the timeline for delivering gas by April 2024.
Legal action is being considered by both parties, with Dana Gas seeking to ensure project completion while Enerflex defends its position. The outcome could impact energy projects in the region where security challenges often complicate operations.