Iraq must import gas from Iran to feed power stations: Official

Iraq’s current production of gas is not enough to meet our power stations’ demand and therefore we are still importing gas from Iran, a senior Iraqi energy official said on Thursday.

We need at least 24 months to operate new gas projects and start production,” Hayan Abdul-ghani, the head of state-run South Gas Co. was quoted as saying by Reuters.

He told reporters that Iraq’s gas output is set to reach 1.3 million cubic feet per day by the end of 2020, an increase of 400 mcf/d from current levels.

The United States said last month that Iraq can continue to import natural gas and energy supplies from Iran for a period of 45 days as long as Iraq does not pay Iran in US dollars. Sanctions on Tehran’s oil sector took effect on Nov. 5.

Baghdad is seeking to renew and extend the exemption as it needs more time to find an alternative source, Iraqi officials said.

Abdul-ghani said the expected rise in gas production would come from two new projects, including a $367 million deal with General Electric reached in April to process natural gas extracted alongside crude oil at two fields in southern Iraq.

The project is expected to start producing 160 mcf/d in two years, Abdul-ghani said.

Iraq is expected to sign another deal in early 2019 to build the Artawi gas plant in the south which is planned to produce around 300 mcf/d by end 2019.

“We are close to signing the Artawi gas project deal with one of the foreign companies in January 2019 to maximize our gas production,” Abdul-ghani said.

Iraq’s gas development plans have long focused on BGC, a $17 billion joint venture between Royal Dutch Shell, state-run South Gas Company and Mitsubishi.

Abdul-ghani said Iraq is seeking to reach gas production of 2,000 mcf/d by the end of 2023, including 1.43 mcf/d from the Basra Gas Co. and additional 500 mcf/d from other future projects in the south.

State-run South Gas Co. is still in talks with US energy company Orion Gas Processors over the economic and technical aspects of a final deal to capture and process 100 mcf/d to 150 mcf/d of natural gas extracted from Nahr Bin Omar southern oilfield, the SGC chief said.