United Arab Emirates energy firm Dana Gas (DANA.AD) said on Wednesday a consortium it co-leads had secured $250 million in financing from the U.S. development agency to fund an expansion of gas production at the Khor Mor plant in Iraqi Kurdistan.

Pearl Petroleum, a consortium co-led with UAE's Crescent Petroleum, secured the 7-year financing from the International Development Finance Corp (DFC), Dana said in a statement.

It is the biggest ever financing by the U.S. development agency in Iraq.

Expansion of the Khor Mor gas plant was halted last year due to the COVID-19 pandemic and is now expected to be completed in April 2023 after construction resumed in April this year.

Dana said the total expansion cost was $630 million.

Under an agreement with Iraq's Kurdistan Regional Government, Pearl Petroleum is to supply natural gas to local power stations.

Developing gas fields in Kurdistan to power local industries would help the region save on fuel costs while also cutting carbon emissions.

The central Iraqi government has also been seeking to speed up development of its gas industry to reduce reliance of gas from neighbouring Iran.

Reuters