Page 5 - MEOG Week 38 2021

MEOG COMMENTARY MEOG

to produce around 100 mmcf (2.8 mcm) per day weaning itself off reliance on gas and electricity
of gas by dehydrating and compressing associ- from neighbouring Iran.
ated gas from the two fields. In July Iran reduced gas flows to power sta-
The plant will subsequently be expanded into tions in southern and central Iraq as the Islamic
a complete natural gas liquids (NGL) plant – Republic struggled to cope with domestic power
recovering around 200 mmcf (5.7 mcm) per day and water crises.
of dry gas, LPG and condensate. A statement from Iraq’s Ministry of Energy
The dry gas will be used chiefly in domestic (MoE) said that gas supplies had fallen by 19mn
power generation, while the LPG and conden- cubic metres (mcm) per day. “The rates of Ira-
sate will be deployed first to meet local demand nian gas being supplied to the production sta-
for cooking fuel – with the remainder sent for tions in the central regions and Baghdad have
export. been reduced from 34 mcm to 20 mcm per day,”
Speaking to MEOG, a representative of the it said, adding that supplies to southern regions
MoO said that the agreement had been expected had dropped from 17 mcm to 12 mcm per day.
to be signed in 2020 but was delayed on account The MoE noted that the country has lost
of the coronavirus (COVID-19) pandemic. around 1,000 MW of electricity production as
The estimated 1.3bn barrel Gharraf field, a result. Iraq is understood to generate around
located around 85 km north of Nassiriyah city, 19,000-21,000 MW, far short of the required level
is operated by Malaysia’s Petronas, which holds of 30,000 MW. In addition to the cross-border
45%. It is partnered by Japan Petroleum Explora- gas flows, Iraq imports around 1,200 MW of
tion (JAPEX) with 30% and state-owned North electricity from Iran.
Oil Co. (NOC). The licence was awarded during Exacerbating the situation, transmission
Baghdad’s second international licensing round lines in the Iraqi governorates of Diyala, Kirkuk
in late 2009. and Salah ad Din have been targeted by attacks
Production belatedly commenced at 100,000 understood to have been carried out by Daesh
bpd in 2014 but the tendering process initiated militants.
the following year to more than double output The MoE said that “great and high co-ordina-
in pursuit of a plateau target of 230,000 bpd tion” had been held between the oil and energy
appeared to stall in the wake of the government’s ministries of the neighbours to compensate for
financial and security crises erupting that year. the reduced volumes.
Capacity at Nasiriyah, which is operated by Gas supplies to Iraq were cut in late Decem-
the state-owned Dhi Qar Oil Co. (DQOC), is ber, with Baghdad owing its neighbour more
believed to stand at around 70,000 bpd, though than $6bn for gas already provided, increasing
production over the last two years has been the likelihood of power shortages across the
hamstrung by Baghdad’s efforts to comply with country. However, an agreement was reached
OPEC+ output restrictions. DQOC also over- days later by Iranian Energy Minister Reza Arda-
sees the development of the Subba field. kanian and his Iraqi counterpart Majid Mahdi
The primary immediate aim of Iraq’s gas for flows to resume at normal rates.
development effort is to meet the domestic With Iraq home to a sizeable gas reserve of 3.5
shortfall of sales gas, thereby resolving the trillion cubic metres, efforts to develop domestic
accompanying popular anger at the serious resources are long overdue and carry the added
power and fuel shortages. benefit of progressing its own version of the
However, the involvement of US firms energy transition as Baghdad seeks to improve
highlights Washington’s desire to assist Iraq in its woeful record on flaring.™

Week 38 22•September•2021 www. NEWSBASE .com P5