Rosneft and the Kurdistan Regional Government (KRG) have agreed to cooperate in the construction of a natural gas pipeline with a 30 bcm of gas per year capacity.

The pipeline will be constructed in 2019 for Kurdish domestic use, with exports due to begin in 2020.

Kurdistan sits on some of the largest untapped gas deposits on Europe’s doorstep and analysts suggest that this investment will allow Rosneft to compete with Gazprom in the supply of natural gas to Europe.

Rosneft is expected to invest billions of dollars in the development of a natural gas pipeline infrastructure and will be repaid through the sale of future gas exports.

“Successful implementation of the project will enable Rosneft to play a leading role in the building and expanding Kurdistan Region’s gas transport infrastructure and create synergy with existing projects for development of the oil and gas fields of the five blocks awarded to the company,” Rosneft said.