Page 9 - MEOG Week 29

MEOG ProJeCts & ComPanIes MEOG
US firms to increase Iraqi gas processing
Iraq
THe Iraqi Ministry of oil (Moo) announced last week that it had signed a deal with Honey- well and Bechtel that would see the US services rms increase the utilisation of associated gas from ve oil elds in Basra Governorate.
In its statement, the Moo said that the addi- tional 600mn cubic feet (17mn cubic metres) per day would come in two stages, with each adding 300mn cubic feet (8.5 mcm) per day.
Honeywell and Bechtel will work together on the project, which is aimed at reducing gas ar- ing from the oil elds by up to 20%, and signed a joint memorandum of understanding (MoU) with the Moo on July 17.
The Al-ratawi gas hub will focus on the Majnoon, West Qurna, Luhais, Tuba and Subha oil elds, with the rst phase lasting 36 months, according to oil ministry spokesman Aassim Jihad. It falls within the wider South Gas Utilisa- tion Project (SGUP) on which a nal investment decision (FID) was taken in January.
Local press reported that the state-owned South Gas Co. (SGC) would work with the US rms.
e MoU was also signed by Iraqi oil Minis- ter amir al-Ghadhban and the new US ambas- sador to Iraq, Mathew Tueller.
Ghadhban told the gathered press that the government and the Moo “are very keen on investing in gas in order to increase the annual budget of the country and increase the produc- tion of Iraqi natural resources, and to also reduce air pollution by not burning the gas anymore,” He added that the deal would also “bene t the electricitysector”.
Baghdad currently lacks su cient domestic gas supplies to meet the country’s power gen- eration requirements. Coupled with de cient electricity infrastructure, these have caused shortages and public anger, erupting in mid- 2018 into violent protests.
A er lengthy negotiations, compounded by security problems near the border, Iraq began
importing gas from neighbouring Iran in 2017, receiving around half of the 10.3bn cubic metres per year contracted in 2017 and covering 10-15% of the power generation sector’s requirements.
is has increased, with Iranian gas for power generation or direct electricity imports account- ing for around a third of demand.
e signature of the US ambassador on the MoU is indicative of Washington’s determina- tion to bring about Iraqi electricity independ- ence and thus reduce trade with its controversial neighbour. When the US re-imposed sanctions on Iran in november 2018, Baghdad was issued with a 45-day waiver to continue importing electricity. is was renewed in December 2018, March 2019 and June 2019 for 90 days each.
making an effort
Baghdad has signed deals with Ge and Siemens to improve electricity provision, and the lat- est deal is part of large-scale e orts to improve power supply.
In January, royal Dutch Shell decided to give the go-ahead to a new phase of the esti- mated $17.5bn SGUP. The development is being executed by the Basra Gas Co. (BGC) JV of state-owned Basrah oil Co., Shell and Japan’s Mitsubishi and will treat, process and distribute associated gas from the giant rumaila, West Qurna 1 and Zubair oil elds.
e latest stage comprises the so-called Bas- rah nGL project, covering the installation of the two-train gas-processing plant at Al-ratawi to the west of Basra to process an additional 4.1 bcmperyearofgas.
According to the statement on the FID, the scheme would entail an increase in the produc- tion of higher-margin LPG for export, as well as providing feedstock for domestic power plants. on February 27, BGC signed a contract with China Petroleum engineering & Construction Corp. (CPeCC) to carry out the work, scheduled for completion in late 2020.™
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