First and foremost, Gonigi was a red dragon. The acid he used to hurt Nakmander was actually his breath weapon. He was working for Kusseth because Kusseth has all the red dragons. Kusseth imprisoned all the red dragons because Kusseth has no coal, so to support their industrialization, they have a series of tubes (like the internet!) running underground into all the red dragon bellies. When Kusseth needs heat for their forges and factories, dwarves riding on large stone golems punch all of the red dragon's in their bellies like rock 'em sock 'em robots.
...I am having a seizure.
Edit After The Fact: Soulless are actually made of dwarf bones and have little dwarves inside them riding Scooty Puff Juniors, and all the little balls are Tesla coils and that is how Soulless are powered.