Will Iraq Finally Start To Use Its Natural Gas Reserves?

Iraq
  • Iraq continues to rely on Iran for around 40 percent of its power supplies.
  • Iraq flared the second largest quantity of gas in the world.
  • The potential for gas capture in Iraq is huge and there are many companies who want to do the projects for Iraq, including Baker Hughes.

It has long been a point of extreme contention with the U.S. that Iraq continues to rely on neighbouring – sanctioned – Iran for around 40 percent of its power supplies, constituted in large part by imports of gas. Although every year when, whoever is prime minister of Iraq at that point goes to Washington to ask for money, promises that this reliance on Iran will end soon, it never does. The solution, though, is simple: Iraq stops burning away all the gas that it releases in the process of extracting oil from its wells and uses this ‘associated’ gas for its power generation. If there is enough of it, which there could be, given the country’s huge oil excavations, then anything left over after powering Iraq properly day and night could be exported and generate much-needed revenues for the country. Last week saw some movement towards this eminently sensible strategy with Iraq’s Ministry of Oil approving increasing associated gas production in the Zubair oilfield to 147 million standard cubic feet per day (mmscf). “The new project aims to raise the number of compressors at the Hammar Mishref station to eleven [which will enable the] raising [of] the compressor capacity from 35 million standard cubic feet per day to 147 million standard cubic feet per day,” highlighted the Director General of the South Gas Company, Hamza Abdel-Baqi.

If this project proceeds then it would be a good start to a broader roll-out of capturing associated gas and using it for purposes that benefit Iraq, rather than just burning it off through flaring at oil wells. Unbeknownst to many, and hardly surprising given Iraq’s appalling record on gas flaring, Baghdad signed up to the United Nations and World Bank ‘Zero Routine Flaring’ initiative – aimed at ending by 2030 the routine flaring of gas produced during the drilling of oil. At that time, Iraq flared the second largest quantity of gas in the world (after Russia) – some 17.37 billion cubic metres. As of this year, Iraq is still the second worst offender in this regard after Russia, although the amount of associated gas flared has decreased to around 16 billion cubic metres. This amount, though, could still power around three million homes day and night, year in, year out. This would go some considerable way to alleviating the extraordinary paradox that Iraq suffers from ongoing power blackouts despite having the fifth largest crude oil reserves on the world (at least 145 billion barrels) and the twelfth largest gas reserves in the world (nearly 131 trillion cubic feet).

It has long been a point of extreme contention with the U.S. that Iraq continues to rely on neighbouring – sanctioned – Iran for around 40 percent of its power supplies, constituted in large part by imports of gas. Although every year when, whoever is prime minister of Iraq at that point goes to Washington to ask for money, promises that this reliance on Iran will end soon, it never does. The solution, though, is simple: Iraq stops burning away all the gas that it releases in the process of extracting oil from its wells and uses this ‘associated’ gas for its power generation. If there is enough of it, which there could be, given the country’s huge oil excavations, then anything left over after powering Iraq properly day and night could be exported and generate much-needed revenues for the country. Last week saw some movement towards this eminently sensible strategy with Iraq’s Ministry of Oil approving increasing associated gas production in the Zubair oilfield to 147 million standard cubic feet per day (mmscf). “The new project aims to raise the number of compressors at the Hammar Mishref station to eleven [which will enable the] raising [of] the compressor capacity from 35 million standard cubic feet per day to 147 million standard cubic feet per day,” highlighted the Director General of the South Gas Company, Hamza Abdel-Baqi.

If this project proceeds then it would be a good start to a broader roll-out of capturing associated gas and using it for purposes that benefit Iraq, rather than just burning it off through flaring at oil wells. Unbeknownst to many, and hardly surprising given Iraq’s appalling record on gas flaring, Baghdad signed up to the United Nations and World Bank ‘Zero Routine Flaring’ initiative – aimed at ending by 2030 the routine flaring of gas produced during the drilling of oil. At that time, Iraq flared the second largest quantity of gas in the world (after Russia) – some 17.37 billion cubic metres. As of this year, Iraq is still the second worst offender in this regard after Russia, although the amount of associated gas flared has decreased to around 16 billion cubic metres. This amount, though, could still power around three million homes day and night, year in, year out. This would go some considerable way to alleviating the extraordinary paradox that Iraq suffers from ongoing power blackouts despite having the fifth largest crude oil reserves on the world (at least 145 billion barrels) and the twelfth largest gas reserves in the world (nearly 131 trillion cubic feet).

Source: oilprice.com

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