Iraq’s 2025 gas pivot: Can Baghdad turn flares into fuel?

Shafaq News – Baghdad

Iraq has moved aggressively in 2025 to overhaul its gas sector—pushing capture projects, sealing multi-billion-dollar partnerships, and tying the effort to electricity security and an export ambition by year’s end.

Oil Minister and Deputy Prime Minister for Energy Affairs Hayan Abdul Ghani says associated-gas utilization has climbed above 70%, a shift he frames as the backbone of Iraq’s energy transition and fiscal stability.

Wealth Ignited

Iraq sits on sizable natural-gas reserves—variously estimated at 127–132 trillion cubic feet—yet production and utilization have long lagged, with most volumes tied to oil output and historically burned off at the wellhead. Multiple datasets and ministry briefings place Iraq among the world’s top flarers, with 2024 flaring at roughly 17.37 bcm (down from 2023) as capture projects slowly come online.

The gap reflects missing midstream: processing plants, compression, and pipelines, and fragmented governance that slowed investment cycles for years.

2025 Momentum

Baghdad’s most visible lever is the $27-billion Gas Growth Integrated Project (GGIP) anchored in Basra. In September, the government presided over joint operating agreements among the Oil Ministry, TotalEnergies, QatarEnergy, and the Basra Oil Company—an umbrella meant to capture and process associated gas, add solar capacity, and deliver the water-injection infrastructure that sustains oil output. The partners reiterated plans to recover up to 600 mmscfd of gas alongside oil development and utility-scale solar.

On the ground, 2025 has featured project starts and facility launches. In January, Abdul Ghani laid the foundation stone for a fast-track gas plant at the Artawi (Ratawi) field in Basra, designed at 50 mmscfd. the “ArtawiGas25” is expected to power around 200,000 Basra-area homes once operational.

In July, the minister inaugurated new processing capacity in Basra—including a central processing facility and a fresh line at the Basra Natural Gas Liquefaction plant—expanding aggregate capacity by an estimated 330 mmscfd while re-committing to end routine flaring before the decade’s end.

Baghdad has paired this with broader upstream cooperation. Senior Iraqi and company officials emphasize that GGIP’s value lies in integration: gas capture feeding power plants, a solar build to ease peak loads, and seawater injection to stabilize oil fields—raising overall system efficiency rather than adding isolated assets.

Tehran's Shadow

From the podiums this year, Abdul Ghani’s message has been consistent: gas capture above 70% is a floor, not a ceiling, and flaring should end by 2028–2029 with the current project pipeline. He has also linked liquid self-sufficiency (notably diesel) to the same suite of investments and logistics upgrades, signaling a pivot away from emergency fuel imports that have strained the budget.

Inside parliament, the tone is more cautious. “There is no immediate substitute for Iranian gas,” lawmaker Ali Saadoun al-Lami told Shafaq News in March, warning that a sudden supply shock would shave megawatts off Iraq’s grid and hit Baghdad and the provinces hardest. That assessment resurfaced when sanctions dynamics complicated import waivers and when attacks disrupted Iranian infrastructure—episodes that exposed Iraq’s vulnerability before domestic capture and processing fully mature.

Molecules to Megawatts

Specialists speaking to Shafaq News have stressed that 2025’s gas push only pays off if midstream and power-sector reforms move in lockstep. Energy analyst Hassan Abdul Jabbar said the revived BP partnerships in the north are meaningful because they “include advanced systems designed to expand [processing] capacity and reduce operational waste”—the kind of incremental fixes that matter between flagship projects.

Deputy Oil Minister for Gas Affairs Ezzat Saber has separately argued that utilization gains must be matched by power-sector restructuring and demand-side management to translate molecules into stable hours of supply.

On the consumption side, international data ranked Iraq 38th globally in gas use this year at more than 19.3 bcm—a reminder that demand is already large and rising. Without capture, that demand crowds out available fuel for industry and locks in imports.

Waivers Say No

To bridge near-term gaps, Baghdad also sought alternative gas via a Turkmenistan swap routed through Iran and managed by a Swiss intermediary. But the Ministry of Electricity acknowledged to Shafaq News this week that US objections have prevented implementation to date—another signal that import-reliant stopgaps remain politically contingent.

Midstream the Wall

Shafaq’s energy coverage this year charts steady but uneven gains. Officially, utilization moved from the low-50s to the high-60s and now above 70% as new units came online; flaring volumes fell marginally in 2024 after years near the top of global rankings. Yet the scale of the problem remains immense: tens of billions of cubic meters burned over the past decade; billions of dollars spent on gas imports; and a national grid still short of peak demand in summer.

Four constraints recur in expert and official commentary who spoke to Shafaq News:

- Midstream gaps: Compression, processing, and trunklines are the rate-limiters. Even where capture rises at the field level, bottlenecks downstream can force venting or renewed flaring during outages.

- Financing and execution risk: Big-ticket projects like GGIP concentrate political and contractor risk; slippage on any element—solar, water injection, or gas hubs—cascades across the system.

- Institutional coordination: Oil, electricity, and provincial authorities must synchronize maintenance windows and dispatch; otherwise, captured gas still fails to map cleanly into power.

- Import exposure: Any shock to Iranian flows—or to waivers—reverberates immediately across Iraqi cities, regardless of progress in Basra.

The 2029 Promise

If the 2025 program holds, Iraq could flip large volumes from flare stacks into power feedstock over the next 24–36 months, with the Artawi units and GGIP phases doing early heavy lifting. Abdul Ghani has tied that trajectory to an export ambition for late 2025—primarily liquids and condensates linked to gas processing—while reiterating a 2028–2029 horizon for ending routine flaring. The credibility of that path will turn on how quickly the new plants ramp, how reliably pipelines and compression stay online, and whether grid upgrades keep pace.

Two signposts to watch

- Field-level throughput: The 50 mmscfd Artawi module is a test of schedule discipline and integration—can Iraq translate modular builds into cumulative capture gains at scale?

- Import diplomacy: The Turkmen swap’s fate—and any renewed US waivers—will determine whether Baghdad can hedge seasonal spikes until domestic capture saturates the power sector.

Written and edited by Shafaq News staff.