Will Iraq succeed in investing its ‘burnt gas’ in 4 years to become major exporter?

The Iraqi government plans to end the file of gas burned daily from its oil fields within four years. This decision aims to end decades of pollution in several Iraqi cities since the discovery of oil at the beginning of the last century.

The importance of this step lies in its completion within the specified time to meet the gas needs of Iraqi power stations and to significantly reduce the quantities imported from it, mainly since Iraq relies on Iranian gas by more than 50% to operate power stations.

Under an agreement with Iran, Iraq imports about 50 million cubic meters of gas per day through a group of pipelines in the east and south of the country that were built to supply Iraqi gas-fired power stations.

Integrated plan

The Iraqi Ministry of Oil announced the development of an integrated plan to invest in the gas associated with oil extraction and prevent its burning during the next four years.

Deputy Prime Minister for Energy Affairs and Minister of Oil Hayan Abdul-Ghani said during a speech at the eighth Iraqi International Conference on Oil, Gas, and Energy on Tuesday that “burning gas has always troubled Iraq because of the difficulty of exploiting its quantities and investing in them instead of burning them.”

“The ministry has plans to invest in gas to ensure that it is completely prevented from burning,” he noted, adding, “The plan will be completed within four years, after which there will be no gas flaring.”

Abdul-Ghanipointed out that the results will be tangible during the first year of the life of the new Iraqi government of Prime Minister Mohammed Shia' al-Sudani, especially in some southern fields.

Agreement with an American company

Iraqi oil expert Hamza Al-Jawahiry believes that “it is possible to invest all the burned gas within the period specified by the minister because its full investment will meet the fuel needs of the electrical stations.”

“Four years is enough time to invest all the associated gas, but it is important that there is no obstruction from a certain party that stops work,” he told Jusoor Post.

The Iraqi oil expert pointed out that “the Ministry of Oil has contracted with an American company to invest in associated gas. It is scheduled to start putting the final designs for the gas treatment plants and then start the process of building these plants.”

He explained, "what has been invested in associated gas is approximately 50% of the total gas burned.”

Al-Jawahirystressed that “investing associated gas and stopping its burning means saving 95% of the imported gas to operate power plants.”

“This matter will mean stopping the import of gas unless the electrical stations expand,” he pointed out.

17 billion cubic meters annually

On the other hand, Zaki Al-Saadi, an expert in Iraqi energy affairs, told Jusoor Post that “Iraq burns 17 billion cubic meters annually,” so he does not think that“all associated gas will be invested within the period specified by the Ministry of Oil.”

“Iraq burns 60% of the gas associated with the oil extraction process, which annually amounts to about 17 billion cubic meters,” he said, explaining that “there is a technical difficulty in the possibility of investing all the gas burned within four years.”

Environmental pollutant

Al-Saadi added, “The associated gas is distributed over a number of fields in separate areas, most of them in southern Iraq, and burning it daily is considered a pollutant to the environment, in addition to the [missed] economic benefits of investing it.”

He pointed out that “natural gas has great economic benefits, as it is involved in the operation of power stations and the manufacture of fertilizers, and it is a global commodity that European countries flock to.”

“Some countries, such as the Gulf states, have stipulated that oil companies must stop flaring gas completely by 2025,” he said.

“These countries also stipulated that it should be invested by isolating it or using the same site to operate some electrical stations, as well as the possibility of injecting it into the well again to strengthen pressure and facilitate the oil extraction process,” he added.

The expert in Iraqi energy affairs explained, “We do not have such a decision yet.”

Self-sufficiency

Al-Saadi stressed that “in the event that burned gas is invested and natural gas is invested in the ground, Iraq can achieve self-sufficiency in gas and the direction to export the surplus abroad after completing the export infrastructure, whether by ships or pipelines through Turkey and then Europe.”

He explained that “Iraq has large reserves of natural gas that exceed 130 trillion cubic meters, but it still imports gas from Iran to operate some power stations.”

“All power stations are supposed to operate on natural gas, and the surplus is exported abroad,” he pointed out.

$2.5 billion a month

On the other hand, SafwanQusay, a specialist in economic affairs, estimates that “the value of burned gas is about $2.5 billion per month.” Therefore, he considered that “Iraq will be one of the major players in exporting gas to Europe in the future.”

“The cost of burned gas is estimated at $2.5 billion per month, and imported gas is close to the same number,”Qusay told Jusoor Post.

“Iraq intends to engage in investing in burnt gas and natural gas underground, which means creating job opportunities and achieving self-sufficiency in gas,” he added.

Qusay stressed that “Iraq is looking forward to ending the gas import file and opening a window for export, especially as the European Union tends to buy gas from other regions of the world, and Iraq is one of the closest countries to the European Union.”

“Iraq has proven reserves of gas that place it in the eighth rank in the world,” according to Qusay, who indicated that the issue of gas is linked to the rise in oil prices. “The higher the oil prices, the more feasible the issue of investing in gas extraction,” he explained.

He pointed out that “in the coming years, Iraq will be one of the major players in the process of exporting gas in the world.”