ERBIL (Kurdistan 24) – OPEC’s second-largest oil producer needs at least two years to develop its gas output before it can stop importing gas from neighboring Iran, utilized to fulfill the needs of its power stations, a senior Iraqi energy official claimed on Thursday.
Iraq’s gas production is expected to reach 1.3 million cubic feet per day by the end of 2020, an increase of 400 mcf/d from current levels, head of state-run South Gas Co. (SGC), Hayan Abdul-Ghani, told reporters.
“Iraq’s current production of gas is not enough to meet our power stations’ demand, and therefore we are still importing gas from Iran. We need at least 24 months to operate new gas projects and start production,” he said, quoted by Reuters.
The US imposed a second round of sanctions on Iran on Nov. 5, which target the country’s energy and financial sectors. Following the coming into force of the sanctions, Washington gave Iraq a period of 45 days allowing it to import natural gas and energy supplies from Iran as long as it does not pay Tehran in US dollars.
Abdul-Ghani stated that the federal government of Iraq is trying to renew and extend the exception as Baghdad works on finding an alternative source.
According to the Iraqi official, the expected rise in gas output would come from two new projects, including a $367 million deal with the American firm, General Electric, reached in April to process natural gas extracted alongside crude oil at two fields in southern Iraq.
The project is to start producing 160 mcf/d in the coming two years, Abdul-Ghani added.
At the beginning of 2019, Iraq is expected to sign another deal to build the Artawi gas plant in the south, which will reportedly produce about 300 mcf/d by end of the same year.
“We are close to signing the Artawi gas project deal with one of the foreign companies in January 2019 to maximize our gas production,” he noted.
Iraq has long focused on the Basrah Gas Company (BGC), a $17 billion joint project between Shell, Iraqi state-run South Gas Company, and Mitsubishi.
The energy official also mentioned his country is planning to produce around 2,000 mcf/d by the end of 2023, including 1.43 mcf/d from the BGC and additional 500 mcf/d from other future projects in the south.
South Gas Company is still in talks with US energy company Orion Gas Processors over the economic and technical aspects of a final agreement to process 100 million to 150 mcf/d of natural gas extracted from Nahr Bin Omar southern oilfield, the South Gas Company chief told Reuters.
In Jan. 2018, Iraq signed a memorandum of understanding with the American company to create facilities that capture gas from the southern country’s field and transform it into usable fuels.
Editing by Nadia Riva