REUTERS | By Dmitry Zhdannikov | MAY 25, 2018

ST PETERSBURG (Reuters) - Russian state oil major Rosneft signed a deal to help Kurdistan develop its gas reserves and build a gas pipeline, expanding the company’s dominance in the energy sector of Iraq’s semi-autonomous region. 

Rosneft said it would conduct a pre-FEED (front engineering and design) of a gas pipeline in Kurdistan as part of its plan to build an integrated gas business value chain in the region. 

It said it would focus on partnerships and third-party project financing for gas projects in Kurdistan. 

Rosneft has agreed to invest billions of dollars in Kurdistan’s oil projects in the past two years including securing control of the region’s oil pipeline. 

That pipeline gave Rosneft access to crucial infrastructure that ships most of the region’s oil to global markets via Turkish territory. 

It made the Kremlin-controlled firm the biggest investor in the region by far, turning Erbil, traditionally a strong U.S. ally, into an important partner for Moscow as Russian President Vladimir Putin seeks to expand influence in the Middle East. 

Russia chose not to oppose the Kurdistan Regional Government’s failed independence referendum last year, which was dismissed as illegal by Baghdad and caused alarm in Washington, the European Union, Iran and Turkey. 

Rosneft also said it aimed to produce up to 10,000 barrels per day of oil in Kurdistan by the end of this year. 

Reporting by Dmitry Zhdannikov; Editing by Dale Hudson