Maximising value

Iraq, where Crescent Petroleum has a rich history, has huge potential with regard to Gas Cities, as it has the opportunity to start afresh.
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Crescent Petroleum already has a long heritage in the country, and was instrumental in the construction of a 180-kilometre gas pipeline to provide feedstock for two independent power plants (1,500MW and 750MW) ordered by the Kurdistan Regional Government.

“Iraq in this regard has huge potential, because it has an opportunity to start afresh, and build the necessary framework today,” said Jafar. “The biggest problem Iraq faces is to break out of that negative mindset and influence that is coming from some of its neighbours, who don’t necessarily want to see Iraq flourish as fast as it can.”

Studies conducted by Gas Cities indicate that there are three areas where the concept would add the most value. In each of those three areas, the firm has reached beyond the preliminary discussion stage.

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“There’s the Kurdistan region of Iraq, where we have identified a 42 square kilometre piece of land in the north,” said Jafar. The second Gas City is in Egypt, where we are currently identifying potential sites, and where we are now working with the Egyptian government.

In addition, in Yemen we have conducted a pre-feasability study along with the Yemeni government to identify a location for the site, and signed an MoU with the government a few weeks ago.

“Yemen is a great example because they know that have gas resources, but their only use at the moment is for LNG export,” Jafar continues.

“Most of the PSAs in Yemen only extend the title holders to the oil, not the associated gas, so there has been no incentive for companies to develop the gas infrastructure. There is now a drive to change some of those contracts to cover titles to the gas too.”

Gas Cities: At a glance
“The concept of Gas Cities is based on the effective utilisation of natural gas as feedstock, thereby maximising the value of industrial outputs. In the Gas Cities, available natural gas is converted into economically viable petroleum related products & derivatives by systematically utilising the operational synergies and economies of scale arising from clustered industrial units.

Designed to be self-sustaining, Gas Cities offers services that will satisfy all industrial/business needs. Highly developed infrastructure ensures smooth logistics, while service facilities like banks, financial centres, engineering and business consultancies offer increased in-house flexibility and inter-cluster synergies.”
Source: www.gascities.com

Analyst BMI’s take on the Yemen Gas City Company
The Yemen Gas City Company is planning a US$20bn industrial city in Hodiedah. Powered by gas, the industrial complex will house petrochemical and heavy manufacturing plants, as well cement plants and power stations.

A memorandum of understanding (MoU) for the project has been signed by the UAE’s Dana Gas and Crescent Petroleum, which are planning to build four gas cities in the Middle East. As well as creating upwards of 90,000 jobs, the gas city is expected to attract US$15bn-US$20bn in foreign investment over the next three decades.