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Iraq eyes ending gas flaring by 2027, as it courts IOCs to capture associated output

Category: Economy

Date: 2021-11-23T07:07:43+0000
Iraq eyes ending gas flaring by 2027, as it courts IOCs to capture associated output

Shafaq News / Iraq expects to end gas flaring at its oil fields by 2027, as OPEC's second biggest producer seeks help from international oil companies to help capture associated gas production, an oil ministry official told S&P Global Platts.

Iraq is implementing various gas capture projects with the help of IOCs to capture associated gas.

Iraq currently flares nearly 45% of its 2.8 bcf/d of gas production, Hammood said.

These projects currently under development should help reduce the associated gas that is being flared.

Iraq was the world's second-worst flaring country after Russia in 2020, burning some 17.37 Bcm of gas last year, according to the World Bank. Iraq has been the world's second-worst gas-flaring nation since at least 2016, World Bank figures showed.

The oil ministry is also in negotiations with IOCs to develop non-associated gas from two fields, Akkas and Mansuriyah, Hammood said.

Iraq needs to boost gas production because it is under increasing pressure from Washington to wean itself off electricity and gas imports from Iran, which has been subject to US sanctions since 2018.

The US administration has been granting Iraq waivers since 2018 to continue importing Iranian energy.

Intermittent supply of gas and electricity from Iran has led to widespread power shortages in Iraq this summer, when temperatures have soared to 50 C, especially in the south.

Adding to Iran's outage is the difficulty Iraq is facing in paying billions of dollars of dues to sanctions-hit Tehran, complicating Baghdad's ability to settle its arrears without the threat of financial repercussions.

Iraq has struck several agreements with IOCs to capture its gas.

The country signed $27 billion worth of projects with TotalEnergies, including a $2 billion gas gathering project.

The Ar-Ratawi gas gathering network and treatment units will have a capacity of 600 MMcf/d to capture flared gas. The project will also produce 12,000 b/d of condensate and 3,000 mt/d of LPG to be used in the domestic market.

The gas project will help reduce reliance on Iranian imports as well as lower burning of liquid fuels for power generation, which amount to 200,000 b/d, oil minister Ihsan Ismaael said at a press conference Sept. 5. Currently, Iraq pays Iran $8/MMBtu for gas, while the Ar-Ratawi project will deliver gas at a cost of $1.50-$2/MMBtu, the minister said at the time.

State-owned South Gas Co. and Baker Hughes plan to develop a 200 MMcf/d gas recovery project in the south following a three-year delay, the oil minister said.

Source: S&P Global Platts

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