Dana Gas said that the 20-year Gas Sales Agreement (GSA) it signed with Kurdistan Regional Government in relation to the second phase of expansion in the Kurdistan Region of Iraq (KRI) aims to increase Pearl Petroleum's (Dana Gas 35 per cent) gas and condensate production by 63 per cent from 400 mmscf/d and 15,000 bbl/d to 650 mmscf/d and 25,000bbl/d respectively.

''The financial impact of this expansion is directly related to the oil price. With oil price ranging between $60-$70 per barrel we expect the new phase of expansion to add $175-$200 million to Dana Gas share of revenues and project's cash flows per annum,” reported state news agency Wam, citing a Dana Gas disclosure letter to the Abu Dhabi Securities Exchange ADX.

“The dividends from Pearl to Dana Gas will be dependent on the investment program and operating cost at Pearl,'' said the letter.

''The financial impact of this transaction will come into effect when the construction of the new capacity is completed in 2021 and the incremental production starts to flow,'' the letter added.

The company and its partners are also planning to further expand production by an additional 250 mmscf/d in 2022 which is expected to have a similar financial impact and will take production of gas and condensate up to 900 mmscf/d and 35,000bbl/d respectively.