Page 14 - NorthAmOil Week 34

NorthAmOil COMMENTARY NorthAmOil

The deals were signed
during Iraqi Prime
Minister Mustafa
al-Kadhimi’s visit to
Washington, DC.
Source: Associated
Press

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

P14 www. NEWSBASE .com Week 34 27•August•2020