Page 5 - DMEA Week 34

DMEA COMMENTARY DMEA

Iraqi Prime Minister
Mustafa al-Kadhimi
meets with US
President Donald
Trump.

improve the reliability of access to electricity, (CPECC) to carry out the work, scheduled for
including efforts related to GE’s existing genera- completion in late 2020.
tion maintenance programme, adding combined Once the NGL plant is operational and
cycle units at the Dhi Qar and Samawah power hooked up to the Iraqi gas network, it will feed
plants, and collaboration on strengthening Iraq’s power stations to generate 1.5 MW or more of
electricity grid and interconnection with neigh- electricity, according to BGC managing director
bouring countries. This final point gained trac- Frits Klap. He added: “The new plant will have
tion when Finance Minister Ali Allawi told the two trains that will require around 70 MW of
Atlantic Council that Baghdad intends to con- electricity to run efficiently.”
nect the Iraqi grid to that of its Gulf neighbours Honeywell signed a deal in mid-2019 along-
as it seeks to reduce its reliance on Iranian gas side Bechtel to increase the utilisation of associ-
and electricity imports. ated gas from five oilfields in Basra Governorate.
GE’s contracts are valued at $1.2bn, and the The two companies agreed to collaborate on
firm said it was working with several export reducing gas flaring from the oilfields by up to
credit agencies to fund more than $1bn of this. 20%. At the time, the MoO said that an addi-
Meanwhile, Stellar Energy agreed a front- tional 600mn cubic feet (17mn cubic metres) per
end engineering and design (FEED) contract to day would come in two stages, with each adding
implement turbine inlet air chilling technology 300mmcf (8.5mcm) per day.
to increase power sector efficiency by up to 30%. Meanwhile, Allawi’s attention also turned
to Ar Ratawi in his comments to the Atlantic
Ar Ratawi Council, noting that Baghdad’s hyped-up poten-
The Ar Ratawi project is perhaps the most tial collaboration with Saudi Arabia would now
intriguing element of these deals, already being focus on “getting the major Saudi stake-holders
key to the South Gas Utilisation Project (SGUP) like [Saudi] Aramco and ACWA [Power] to be
on which a final investment decision (FID) was involved in the gas gathering” at Ar Ratawi.
taken by super-major Royal Dutch Shell in Jan- He added: “The reason why the Saudis are
uary last year. interested in this is because you can actually
The $17.5bn development is being executed ring-fence it so that you do not have to deal with
by the Basra Gas Co. (BGC) joint venture (JV) the red tape and bureaucracy that bedevils for-
of state-owned Basrah Oil Co. (BOC), Shell and eign investors.”
Japan’s Mitsubishi. It will treat, process and dis- While the tie-up with Riyadh has been in the
tribute associated gas from the giant Rumaila, works for at least a year, Aramco is yet to collab-
West Qurna 1 and Zubair oilfields. orate on an upstream project outside its home
The latest stage comprises Basrah NGL, cov- country, aside from assets it jointly owns in the
ering the installation of the two-train gas-pro- shared Partitioned Neutral Zone (PNZ) with
cessing plant at Ar Ratawi in the west of Basra Kuwait. In addition, with the Saudi company
to process an additional 4.1bn cubic metres per slashing 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 27•August•2020 www. NEWSBASE .com P5