On July 18, 2009, the first oil from the Khurmala Dome Central Process Station was processed and transported by pipeline to supply the new 20,000 barrel per day Erbil Refinery.

The Khurmala Dome is the northern most dome of the Kirkuk oil field structure.  The Dome is approximately 20 kilometers by 8 kilometers and lies fully on the territory of Erbil Governorate.  During a meeting on November 24, 2008, between Kurdistan Regional Government Prime Minister Nechirvan Barzani and Iraqi Minister of Oil Dr. Hussein Al-Shahristani, it was jointly decided that the Khurmala Dome would be developed and operated to supply oil for the Erbil Refinery.  KAR Oil & Gas Ltd. was chosen to build and operate the facilities.

KAR Oil & Gas has unique experience with the Khurmala Dome.  In December 2004, KAR Oil & Gas was awarded an engineering and procurement contract by the Iraqi Ministry of Oil State Company for Oil Projects (SCOP).  The 140 million USD contract was the first ever awarded to an Iraqi company for an oil field development project in Iraq.  KAR sub-contracted DPS Engineering of Bristol, UK, to provide engineering expertise to bring the field to 100,000 barrels a day of production, and KAR led the effort to procure the massive equipment for the project.  By early 2007, all equipment had arrived at Khurmala and was ready for installation and use, but no decision was taken to begin construction.

In late-November 2008, KAR Oil & Gas began fast-track construction of Phase One of the multi-phase project to bring the field to initial production by July 2009.  KAR mobilized more than 1,000 team members, over 95 percent of whom were Iraqi, to build world standard facilities using the latest technologies.  In a short seven months, KAR invested 150 million USD and achieved the Phase One goal of installing the equipment to produce 50,000 barrels of oil per day from the Khurmala Dome.

The Khurmala Dome is divided into three sections: North, Middle and South.  In the North and Middle, KAR rehabilitated 40 previously drilled and capped wells to prepare them for production.  63 kilometers of flow lines were installed to connect the well heads to the manifold collectors that KAR installed at the North and Middle Stations.  Test separators were installed at the North and Middle Stations allowing for precise well management and isolation for superior operations.  Two 20 inch trunk lines, for a total of 14 kilometers, were built – one each from the North and Middle Stations to the Central Process Facility. 

The Central Process Facility, approximately 200,000 square meters in size, was constructed with inlet collectors, production separators for separating the oil and associated gases, high and low pressure flares for gas flaring, pumps with capacity to push up to 225,000 barrels of oil per day, full health, safety and fire fighting systems and all infrastructure to rapidly scale the production facilities to 150,000 barrels a day of production.  A 40 kilometer, 20 inch pipeline was installed and buried to carry oil from the Central Process Station to the Erbil Refinery.

KAR Oil & Gas will continue to add capacity and facilities at the Central Process Station to process up to 150,000 barrels of oil per day and 100 million standard cubic feet of gas.  In the coming months, facilities will be added to capture the gas, process it and use it for industry such as power generation.  Additional facilities to treat the oil, such as desalters and water treatment will also be installed.

KAR Oil & Gas is committed to a safe working environment.  KAR’s health, safety and security systems are world standard, and since the inception of the project, no major accidents have been recorded.

KAR Oil & Gas is proud to be contributing to the development of the hydrocarbon sector in Iraq.  In the past, the government did not allow local companies to participate in the oil sector, but the leadership of the Kurdistan Regional Government has enabled an environment that makes it possible for local companies to participate and lead in this vital industry.  KAR Oil & Gas looks forward to the bright future it has in the ever dynamic hydrocarbon sector in Iraq.

FAST FACTS:

• The high Pressure flare is 55 meters in height
• The low pressure flare is 25 meters in height
• Phase 1 has 1.7 megawatts of power production and four transformers
• 30,000 meters of cable trays
• 3.5 kilometers of internal roads
• Accommodation for 300 persons
• 10,000 cubic meters of concrete
• 250,000 cubic meters of earth moved
• 45,000 dia-inch of pipe welding

Hamrin field is located 75 km southwest of Kirkuk and 200 km northwest of Baghdad.  It consists of three structural features:  Allas, Nukhaila and Albo Futhol Domes of which the first two structures were part of this project.
Facilities were designed for an initial production rate of 100,000 bbl/day, as long the wells do not produce any significant amounts of water (1 to 2%). The design rate for the development will drop to 60,000 bbl/day if the wells begin to produce more water.
Gas lift equipment was provided for installation on all oil wells.
This project was awarded by SCOP to OGI Group, Canada.  KAR signed a joint venture agreement with OGI as a partner in the execution of the project. This agreement was accepted by SCOP, and the project is now complete.

Luhais & Subba oil fields, which have already been partly developed, are located in southern Iraq.  The Luhais oil field is located approximately 120 km west of Basra city and 60 km west of the existing Rumaila oil field.  Subba oil field is located approximately 105 km southeast of Nassirya city and 30 km northwest of Luhais oil field
The State Company for Oil Projects (SCOP) issued a competitive tender for the further development of both fields under one project.
The Luhais development consists of one 50,000 bbl/d gas oil separation train at Luhais Central Station.  The oil is exported via a 12 inch line to the PS-1 oil depot, 57.5 km northeast of the field.  Approximately 10 MMSCf/d of gas is exported to the Gas Treating Unit at North Rumaila via a 12 inch pipeline.  Gas from the downstream separation stages is currently flared.
For the Luhais development, the scope of this project included the tie-in of infill wells, developing a new satellite degassing station (Luhais North), and to expand the facilities at Luhais Central in order to increase design throughput from 50,000 bbl/d oil to150,000 bbl/d.  Gas compression facilities with a design capacity of 26 MMSCF/d will be installed.  A new gas dehydration unit, with a design capacity of 40 MMSCf/d, will be dedicated to the treatment of first stage separator off gas.  The segregated gas streams will be transported via two new 55km gas export pipelines (one 24 inch and the other 28 inch) to an existing NGL plant at North Rumaila.  Export routes for the increased crude oil production will consist of:
-Existing 12 inch crude oil pipeline to PS-1
-Existing 12 inch gas export pipeline to GTU-1 will be converted to oil export service and the end of this line will be re-routed from GTU-1 to PS-1 (approximately 3.5 km of new pipe required)