The UAE-based Crescent Petroleum and its affiliate Dana Gas will begin supplying natural gas in Iraq's Kurdish region soon.

The $650-million project will initially supply 150 million cubic feet per day (cfd) to Kurdish power plants, rising to 300 million cfd in early 2009, the companies said in a statement.

Dana and Crescent signed the deal to redevelop the Khor Mor field in the Kurdish region to supply gas to the power plants in April 2007. The field was shut after the first Gulf War in 1991.

The two companies also signed up to evaluate the region's gas reserves and to build a large gas-fed industrial complex called Kurdistan Gas City.

Initial investment in the basic infrastructure for the complex would be $3 billion, the companies said on Tuesday. They gave no further details on how much of the $3 billion Crescent and Dana would contribute.

The semi-autonomous Kurdish regional government has allocated land for the complex, which the companies said would eventually attract more than $40 billion in foreign direct investment.

The complex will house at least 20 large petrochemical and heavy manufacturing plants, they said.

Crescent and Dana have formed a joint venture, Gas Cities, to develop the complex and others in the Middle East, North Africa and South Asia, the companies said.- Reuters