Fatal explosion closes Dana Gas plant in Iraq

The driver of a lorry carrying liquefied petroleum gas (LPG) died in an explosion at a Dana Gas plant in the Kurdistan region of Iraq. The explosion on Friday was caused when two LPG lorries belonging to a local trader caught fire as they were being filled at the plant in Khor Mor. Four other people were injured and the LPG-loading facility suffered serious damage, according to a statement from the UAE company that was posted on the Abu Dhabi stock exchange yesterday. "As a precautionary measure, the plant has been temporarily shut down while a full investigation is conducted and repairs are carried out," Dana Gas said. Partial operations resumed on Saturday at the plant's production facilities that supply local power plants with natural gas. The Khor Mor LPG plant is part of Dana's substantial portfolio in Kurdistan, one of the two pillars of its business. Its presence in the autonomous region of Iraq is through a 40 per cent stake in Pearl Petroleum Company. Apart from its LPG plant, Pearl also operates production at the Khor Mor field and has constructed a 176km natural-gas pipeline that delivers gas to power plants in Erbil, the Kurdistan capital, and Barian in Pakistan. The Khor Mor plant began operations last year after the field started yielding gas in 2008. The output feeds into the domestic market, enabling the Kurdish Regional Government to supply the four million Kurds living within its borders with electricity. While the total development costs of Khor Mor tops US$900 million (Dh3.3 billion), Dana and its partners have only seen intermittent payments out of Kurdistan. Combined with payment delays in Egypt, Dana's other main market, the tardiness of Kurdish payments have led to a precarious financial situation at Dana, a subsidiary of Crescent Petroleum based in Sharjah. As a result, the Abu Dhabi-listed gas producer is tipped to restructure a $1bn sukuk due in October. In spite of a partial resumption of payments out of Kurdistan, the company does not appear to have the financial resources to repay the Islamic bond upon maturity. From TheNational