Page 5 - MEOG Week 34

MEOG COMMENTARY MEOG

by deals with General Electric and Stellar Energy. (CPECC) to carry out the work, scheduled for
GE signed three agreements that will improve completion in late 2020.
the reliability of access to electricity, including Once the NGL plant is operational and
efforts related to GE’s existing generation main- hooked up to the Iraqi gas network, it will feed
tenance programme, adding combined cycle power stations to generate 1.5 MW or more of
units at the Dhi Qar and Samawah power plants, electricity, according to BGC managing director
and collaboration on strengthening Iraq’s elec- Frits Klap.
tricity grid and interconnection with neighbour- He added: “The new plant will have two trains
ing countries. that will require around 70 MW of electricity to
This final point gained traction when Allawi run efficiently.”
said that Baghdad intends to connect the Iraqi Honeywell signed a deal in mid-2019 along-
grid to that of its Gulf neighbours as it seeks to side Bechtel to increase the utilisation of associ-
reduce its reliance on Iranian gas and electricity ated gas from five oilfields in Basra Governorate.
imports. The two companies agreed to collaborate on
GE’s contracts are valued at $1.2bn, and the reducing gas flaring from the oilfields by up to
firm said it was working with several export 20%. At the time, the MoO said that an addi-
credit agencies to fund more than $1bn of this. tional 600mn cubic feet (17mn cubic metres) per
Meanwhile, Stellar Energy agreed a front- day would come in two stages, with each adding
end engineering and design (FEED) contract to 300mmcf (8.5mcm) per day.
implement turbine inlet air chilling technology Meanwhile, Allawi’s attention also turned
to increase power sector efficiency by up to 30%. to Ar Ratawi in his comments to the Atlantic
Council, noting that Baghdad’s hyped-up poten-
Ar Ratawi tial collaboration with Saudi Arabia would now
The Ar Ratawi project is perhaps the most focus on “getting the major Saudi stake-holders
intriguing element of these deals, already being like [Saudi] Aramco and ACWA [Power] to be
key to the South Gas Utilisation Project (SGUP) involved in the gas gathering” at Ar Ratawi.
on which a final investment decision (FID) was He added: “The reason why the Saudis are
taken by super-major Royal Dutch Shell in Jan- interested in this is because you can actually
uary last year. ring-fence it so that you do not have to deal with
The $17.5bn development is being executed the red tape and bureaucracy that bedevils for-
by the Basra Gas Co. (BGC) joint venture (JV) eign investors.”
of state-owned Basrah Oil Co. (BOC), Shell and While the tie-up with Riyadh has been in the
Japan’s Mitsubishi. It will treat, process and dis- works for at least a year, Aramco is yet to collab-
tribute associated gas from the giant Rumaila, orate on an upstream project outside its home
West Qurna 1 and Zubair oilfields. country, aside from assets it jointly owns in the
The latest stage comprises Basrah NGL, cov- shared Partitioned Neutral Zone (PNZ) with
ering the installation of the two-train gas-pro- Kuwait.
cessing plant at Ar Ratawi in the west of Basra In addition, with the Saudi company slash-
to process an additional 4.1bn cubic metres per ing spending as it seeks to protect its sacred
year of gas. dividend, it remains to be seen whether such a
According to the statement on the FID, the development on Iraqi territory would be given
scheme would entail an increase in production priority over other projects closer to home.
of higher-margin LPG for export, as well as pro- As such, Brouillette is likely to be correct in
viding feedstock for domestic power plants. In that the involvement of US firms will be ‘key’ to
early 2019, BGC signed a contract with China any progress Iraq is able to achieve in gas capture
Petroleum Engineering & Construction Corp. and electricity connectivity.™

Week 34 26•August•2020 www. NEWSBASE .com P5