GAS AND POWER: Despite huge reserves, Iraq doesn't have enough gas
| Published date | 01 August 2017 |
| DOI | http://doi.org/10.1111/oet.12495 |
| Date | 01 August 2017 |
GAS AND POWER
Despite huge reserves, Iraq doesn’t have enough gas
A deal to import g as from Iran will help Iraq to reduc e its
chronic shortages of electricity by providing the fuel for
a number of power stations; but a lot moregas is needed
to end the frequent powe r cuts. Iraq has plenty of ga s of
its own and there wereonce plans for large scale exports.
Now, although, it cannot even produce enough to meet
its most basic needs.
e agreement with Iran is for the supply of just
under 250 mn cfd ofg as,w hich will be used to fuel three
power stations in Baghdad and the adjacent province
of Diyala. Iraq’s Ministry of Electricity has announced
plans for a series of gas-red power stations; but it is
not yet clear where the gas to fuel them is to come
from. Iran has been approached to supply more gas,
including a further 250 mncfd to supply power stations
in the Basrah governorate. e Iranians were originally
asked to supply 1.5 bncfd. It is not yet clear when any
of the additional volumes will arrive. Meanwhile, Iraq is
struggling to increase its production of gas.
What’s the problem?
Iraq possesses large proven reserves of natural gas. Its
production, on the other hand, is small and its consump-
tion is in consequence restricted (see Tabl e D ). e r e
were once plans to export g as to Kuwaitbut t hese fell foul
of the politics that led to Iraq’s invasion of its souther n
neighbour in 1990. e sanctions that followed, espe-
cially those imposed by the US, and the subsequent
invasion by the US and its allies and its violent aer-
math have set back Iraq’s gas developments by more
than two decades. Only recently has there been any sign
of a revival in the gas industry, mainly as the resu lt of
a single large gas recovery project in the south of the
country.
Lastyearwitnessedanincreaseinnetproductionof
about a third thanks to the Basra h Gas project, which is
designed to capture the large volumes of associated gas
that are currently are d owing to the lack of a proper
gas-gathering system in Iraq’s southern oilelds. Last
year, about two-thirds of Iraq’s total gas production was
wasted in this way.
Gathering gas
e project is being undertaken by a joint-venture of the
state-owned South Gas Company, Shell and Mitsubishi.
e venture was created in 2013 under the name of the
Basrah Gas Company (BGC). It’s aim is to capture the
gas that is produced in association with oil in the th ree
large southern oilelds of Rumailah, West Qurnah, and
Zubair.Oncegathered,thegasisprocessedbyBGC,
theliquidsrecoveredandthedrygasusedtogenerate
Table D
Iraq: Gas Prole, 2016
Proven Reserves 111.5 tcf∗
Reserves Remaining 112.8years†
(bn cfd)
Production
Gross 2.7
Flared 1.8
Net 0.9
Consumption
Total 0.9
Net Trade
Total –
∗As of 1.1.17
†Based on gross production
Source: (Reserves) Oil & Gas Journal
(Other) Author’s estimate
electricity.B GC was recovering an estimated 570 mn cfd
in 2016, but this is still not sucient to supply all the
power stationsthat are needed to generatethe electricity
needed not only for homes and industry but a lso for
oil production activities, some of w hich are adversely
aected by the lack of sucient electricity : hence the
approach to Iran for the supply of more gas.
For all thecontribution to Iraq’s presentproduction by
BGC, Iraq’s gas production (excluding gas that is ared)
is still below the peak of 1.4 bncfd, which was achieved
as long ago as 1979. Part of the reason is the fall in
oil production since that time. Nearly all of Iraq’s gas
is produced in association with oil, and the year 1979
coincides with the country’s then peak output of oil,
when it reached 3.5 mn bpd. Output fell in the 1980s
during Iraq’s war with Iran and remained depressed i n
subsequent decades because of sanc tions and war, only
recovering to its former peak in 2015. In that time,
however, much of the gas-gathering infrastructure was
damaged or destroyed. BGC is the rst serious attempt
to remedy this situation.
More work needs to be done on recovering gas if the
electricityindustryistomeetitstargetstoaddmore
gas-red generating capacity. is is not the only con-
straint, however,since increasing the production of asso-
ciated gas requires a rise in oil production, and plans to
increase oil production may be delayed if global crude
oilpricesremainclosetopresentlevels.
More free gas
eremaybemoregasavailableinfuturefrom
non-associated gaselds. Progress on developing these
hasbeenslowuptonow.Ontheotherhand,thereare
a number of new gas projects planned for the Kurdish
north of Iraq. e Kurdistan Regional government
© 2017 John Wiley& Sons Ltd
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