Abu Dhabi-listed Dana Gas has formally issued a notice of termination to Enerflex, the engineering, procurement, and construction (EPC) contractor for the $600 million Khor Mor gas expansion project (KM250).

The notice, issued on Monday, 19 August, was given following numerous performance issues arising during the execution of the contract, Dana Gas said in a statement on Tuesday.

The ongoing impact of these performance issues has materially affected Enerflex’s ability to meet its contractual obligations, leading to unacceptable delays and hindering the progress and timely completion of the KM250 in the Kurdistan Region of Iraq (KRI). 

As a result, Pearl Petroleum has been compelled to intervene directly to ensure the timely and successful completion of the project. 

The action will enable Pearl Petroleum, a joint venture between Dana Gas and Sharjah-based Crescent Petroleum, to assume direct control over the remaining phases of the project, ensuring that it is brought back on track and completed in the timeliest manner. 

In addition, Pearl Petroleum reserves all its rights under the contract including potential claims for damages, the statement said. 

In April, Dana Gas CEO Richard Hall said the construction of KM250 was expected to be completed in the second half of 2024.

(Editing by Anoop Menon) (anoop.menon@lseg.com)

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