On Tuesday, Dana Gas announced that Pearl Petroleum Co. Ltd. has initiated arbitration proceedings against Enerflex, the engineering, procurement, and construction contractor for the Khor Mor 250 gas production increase project.

In August, Pearl Petroleum issued an official notice terminating its contractual relationship with Enerflex due to the latter's inadequate performance in executing the contracted work.

"Enerflex's poor performance severely impacted its ability to meet obligations, causing significant delays in the project in Iraq's Kurdistan Region (KRI)."

“Pearl reserves its full rights under the contract, including claims for damages.”

According to the company's statement, “this termination became effective on September 9, and Pearl Petroleum has since begun arbitration proceedings under the contract to recover costs and claim damages resulting from Enerflex's underperformance.”

Pearl Petroleum—a consortium led by Crescent Petroleum and Dana Gas—reaffirmed its commitment “to ensuring the project's successful completion and safeguarding the interests of stakeholders and the KRI people.”

Dana Gas confirmed that it will update the market on the new expected completion date for the project, as it works with its partners at Pearl Petroleum to get the project back on track.

Notably, the Khor Mor gas field in the Chamchamal district of al-Sulaymaniyah is Iraq's largest-producing gas field, covering 135 square kilometers. With 8.2 trillion cubic feet of reserves, it is crucial to generating electricity, supplying 67% of Kurdistan's needs. Managed by a consortium led by Dana Gas, production has been disrupted by repeated attacks, delaying expansion plans.