Shafaq News- Basra

Iraq’s gas sector, particularly in the southern regions, is witnessing a sharp decline in production amid ongoing regional tensions and the closure of the Strait of Hormuz, directly impacting the country’s energy system due to its reliance on oil output.

The drop follows reduced oil production and the halt of exports, leading to lower volumes of associated gas. This has forced authorities to adopt alternative measures to maintain supplies, especially for power plants and the domestic market.

Ali Salman Majid, Director of the South Gas Company, told Shafaq News that raw gas production has fallen significantly. “Production previously reached around 1.2 billion standard cubic feet but has now dropped to about 400 million due to reduced oil output,” he said, noting that the decline has affected dry gas, liquid gas, and condensates.

He added that dry gas output also dropped from 1.1 billion to around 400 million standard cubic feet, directly impacting electricity generation. However, the Oil Ministry has compensated by using alternative fuels such as gas oil and crude oil.

“Liquefied gas production at the South Gas Company declined from about 6,000 tons per day, while Iraq’s total output previously ranged between 9,000 and 10,000 tons per day,” Majid stated, adding that Current nationwide production has fallen to around 5,000 tons daily, with the company’s output dropping to approximately 1,800 tons.

He noted that while 2,000 to 3,000 tons per day were previously allocated to the domestic market and the rest exported, exports have now stopped.

Despite the decline, Majid confirmed there is no shortage of cooking gas domestically. “Available stock exceeds 40,000 tons, in addition to underground and surface reserves of more than 30,000 tons,” he said, clarifying that these amounts, along with ongoing production and refinery supplies, “ensure full coverage of local demand.”

He added that investment projects under the South Gas Company continue without interruption, supported by available materials and ongoing operations, including foreign expertise. Accelerated projects have also been launched to mitigate the crisis, including the Bin Omar field project, where gas is being redirected to the Basra Gas Company.

The project is expected within 15 days to produce around 500 tons of cooking gas daily, along with dry gas, potentially preventing any supply shortages.

On long-term plans, Majid said the Artawi gas investment project, with a total capacity of 600 million standard cubic feet across two phases, is expected to become operational between 2028 and 2029. The Nasiriyah gas project is scheduled to begin operations in the first quarter of 2027 with a capacity of 200 million standard cubic feet. He added that the Bin Omar investment project, also consisting of two phases with a capacity of 150 million standard cubic feet each, is currently stalled due to land acquisition issues but is expected to resume, with operations projected between 2028 and 2029.

Earlier on Tuesday, the International Energy Agency sharply revised down its forecasts for oil supply and demand growth, citing the impact of the Middle East conflict on global flows and economic conditions.