Dana Gas signs agreements with Kurdistan Regional Government of Iraq

These agreements form part of a strategy to advance the considerable economic benefits available to the region through the successful development of its substantial gas resources.

The agreements were signed in Erbil by His Excellency Nechirvan Barzani, the Prime Minister of the Kurdistan Regional Government, and Hamid Dhiya Jafar, Executive Chairman of Dana Gas, in a ceremony that was attended by other KRG officials, as well as by several Members of the Board of Directors of Dana Gas, and Directors of Crescent Petroleum.

Under the terms of the Strategic Alliance Protocol, the Kurdistan Regional Government, Dana Gas, and its affiliate Crescent Petroleum will jointly review the natural gas resources in the Kurdistan Region of Iraq with a view to the optimization, development and utilization of that substantial resource.

As part of the Strategic Alliance Protocol, the "Kurdistan Gas City" project was launched. This is a major new gas-utilization industrial complex designed to promote private sector investment in a variety of gas-related industries for optimal use of the region's natural gas resources. These will further benefit the country's citizens through training, job creation, and the promotion of general economic activity.

In addition, Dana Gas was appointed on a service contract basis to develop, process and transport natural gas from the Khor Mor Gas Field on a fast-track basis, and to also concurrently appraise the potential of the Chemchemal Gas Field, in order to provide urgently-needed natural gas supplies to fuel domestic electrical power generation plants currently under construction near Erbil and Suleymania, by January 2008. For this purpose, Dana Gas will be diverting a state-of-the-art gas processing plant currently nearing completion which it had previously acquired for another project, in order to circumvent the typical 2-year lead time required for a new construction.

His Excellency Nechirvan Barzani, Prime Minister of the Kurdistan Regional Government of Iraq, said:

"We are very pleased to enter into this strategic partnership with Dana Gas, as a regional company and one that is fully committed to the region and all aspects of the natural gas sector. The Kurdistan Region is in urgent need of natural gas as fuel for electricity generation projects that are long overdue, and will benefit not only the people of the Kurdistan Region but contribute to affordable electricity for the whole of Iraq. We are also devoted to launching private-sector initiatives for development of additional industries and inviting related investments so as to enhance job creation and boost the economy of the Region and in turn the entire country. We are confident that this important initiative by the KRG with Dana Gas will set an excellent example to other regions and governorates of Iraq for the country's economic development for the benefit of all Iraqis."

Hamid Dhiya Jafar, Executive Chairman of Dana Gas, said:
"Dana Gas is honored to enter into these important agreements with the Kurdistan Regional Government of Iraq to jointly develop the strategy for its natural gas resources. As a regional integrated natural gas company, we are able to provide a complete solution of gas field development, processing and transportation that is urgently required on a fast-track basis for electrical power generation. In addition, we are excited by the launch of the Kurdistan Gas City endeavour, and the opportunity to work alongside the Kurdistan Regional Government for the development of a long-term plan to maximize the economic benefit of natural gas resources. We hope that this is the first of many concrete projects that Dana Gas and Crescent will undertake in Iraq, as we are from the region and here for the long-term."