The development of the world-class Miran and Bina Bawi fields is set to unlock significant value for both Genel and the KRG, assisting the Kurdistan Regional Government in satisfying domestic gas demand and its obligations under the KRG-Turkey Gas Sales Agreement.
In September 2015, Genel completed the acquisition of OMV’s 36% operated stake in the Bina Bawi field, consolidating the ownership structure across both Miran and Bina Bawi, streamlining project management and providing flexibility in meeting development goals.
The development of the fields is a unique opportunity, and promises to deliver significant value for shareholders. The fields are 300 km from Turkey, one of the world’s fastest growing major gas markets with expected demand growth of 3% per year until 2020 at least. Turkish gas demand makes the KRI’s gas reserves of far greater strategic importance than oil, and they provide Turkey with the opportunity of materially reducing their gas import costs.
Turkey currently consumes approximately 50 bcma of gas, of which more than half is provided by Russia. With the KRG set to provide 20 bcma, this gas will help to diversify, and indeed form the baseload of Turkish supply, at a cheaper price than all current imports.
The project is underpinned by the KRI-Turkey Gas Sales Agreement, and the development is now progressing on the ground in Turkey, with BOTAS having begun its tendering process for the construction of the Turkish stretch of the pipeline.
It is a world-class development with a committed government buyer for the gas in place.
At Miran and Bina Bawi, 2016 activity will focus on delivering the upstream gas development plan and geological/geophysical studies, and work will also commence on the front end engineering design and financing plans for the midstream gas processing. Capital expenditure for the gas project during 2016 is estimated at c.$25 million.