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Pearl Petroleum, a unit of UAE natural gas giant Dana Gas, has started arbitration proceedings against Enerflex, the EPC contractor of the Khor Mor 250 project in the Kurdistan region of Iraq.
Following the termination of the contract on 9 September, Dana Gas said Pearl Petroleum initiated arbitration action “in accordance with the contract to recover costs and damages arising from Enerflex’s defective performance,” according to an ADX disclosure.
Dana Gas added it will update the market on the new expected completion date in due course as it works “to bring the project back on track.”
On August 19, Pearl Petroleum issued a notice of termination to Enerflex, citing numerous “performance issues” which had arisen during the execution of the contract works.
According to an August 20 ADX filing, the Sharjah-based Dana Gas said the impact of these issues materially affected Enerflex’s ability to meet its contractual obligations, “leading to unacceptable delays and hindering the progress and timely completion of the Khor Mor gas expansion project (KM250).”
Founded in 2009 with joint operators Dana Gas and Crescent Petroleum, Pearl’s shareholders include the OMV of Austria and MOL of Hungary, two major European energy companies, each with a 10% stake, along with RWEST of Germany, which also acquired a 10% share in the company in 2015.
(Writing by Bindu Rai, editing by Brinda Darasha)
