Iraq needs two years to wean it­self off Iran gas: of­fi­cial

The Daily Star (Lebanon) - - BUSINESS - By Aref Mo­hammed

BASRA, Iraq: Iraq needs at least two years to boost the coun­try’s gas pro­duc­tion to stop im­port­ing Ira­nian gas used to feed its power sta­tions, a se­nior Iraqi en­ergy of­fi­cial said Thurs­day.

Hayan Ab­dul-Ghani, head of state-run South Gas Co., 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.

“Iraq’s cur­rent pro­duc­tion of gas is not enough to meet our power sta­tions’ de­mand and there­fore we are still im­port­ing gas from Iran. We need at least 24 months to op­er­ate new gas pro­jects and start pro­duc­tion,” he said.

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 U.S. 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.

‘We are close to sign­ing the Artawi gas project deal’

Ab­dul-Ghani said Iraq is seek­ing to reach gas pro­duc­tion of 2000 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 U.S. 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 oil field, the SGC chief said.

On Jan. 22, Iraq signed a mem­o­ran­dum of un­der­stand­ing with the U.S. com­pany to build fa­cil­i­ties to cap­ture the gas from the field lo­cated in south­ern Iraq and to trans­form it into us­able fu­els.

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