About a year ago, I wrote about Iraq’s deals with BP and
TotalEnergies to capture flared associated natural gas from the country’s oil
fields for domestic use. At the time, I failed to mention another benefit of
doing this: reducing dependency on Iran for gas and electricity imports. I can
support just about anything that reduces income for Iran’s sinister regime,
which is currently teetering due to mass protests. It also weakens the Iranian plan of exerting regional power.
Simon Watkins, author of the
2023 book, The New Global Oil Market Order And How To Trade It,
writes for Oil Price US that the Iraqi Oil Ministry is:
“…expediting the development of the Gharraf and
Nassiriyah gas projects, with full operations expected to begin by early 2027,
and production capacity reaching 200 million standard cubic feet per day
(mmscf/d).”
In April, the U.S. Congress
introduced the ‘No Iranian Energy Act,’ which intends to punish the world’s
largest sponsor of terrorism and the world’s leader in executing political
prisoners by disallowing them to sell energy as much as possible, including to
Iraq.
“Until very recently, Iraq was the world’s second
largest gas flarer after Russia, burning more than 17 billion cubic metres
(Bcm) a year.”
That is equivalent to nearly
600 BCF per year or about 1.65 BCF per day. That is quite a lot of natural gas
being wasted. Capturing it for domestic use makes economic and climate sense.
The project will also require processing plants and pipelines to power plants
and other points of use. The southern Iraq fields hold gas reserves of around
3.5 trillion cubic metres or 122.5 TCF, around three-quarters of which is
associated gas, which refers to gas that is produced in association with oil
production, which is the primary reason due to its higher price. IEA estimates
there is 8TCM (280TCF) and 70% is associated gas. That is quite a lot of gas.
That gas needs to be managed better, and producing it along with the oil is the
obvious way to manage it.
In 2018, Baker Hughes was set
to capture and produce gas from these fields, but these projects ended up being
delayed. Now. Baker Hughes is working with state-owned South Gas Company and
China Petroleum Engineering & Construction Corporation.
Watkins explains the plan to
build processing plants to extract NGLs:
“According to the Oil Ministry, the first phase of the
Baker Hughes plan involved deploying an advanced modular gas-processing system
at the Integrated Natural Gas Complex in Nassiriyah to dehydrate and compress
flare gas, generating more than 100 mmscf/d. The second phase would expand the
Nassiriyah facility into a full natural gas liquids (NGL) plant capable of
recovering 200 mmscf/d of dry gas, LPG, and condensate. All of this output was
earmarked for domestic power generation, with Baker Hughes estimating that
capturing the flared gas from these two fields alone could supply around 400
megawatts to the Iraqi grid. At the time, deputy oil minister Karim Hattab said
the project would take 30 months to complete – so it should have been finished
around four years ago.”
The U.S. had given waivers
for Iraq to receive sanctioned gas from Iran, but that is likely to change.
Iraq had better hurry up and get these projects going faster. However, this
also hinges on geopolitics and the configuration of Iraq’s government.
“As a senior source close to Iraq’s Oil Ministry exclusively told OilPrice.com last week, the choice here -- as with most oil and gas decisions in the Middle East -- has far more to do with geopolitics than with energy. “If [current Prime Minister, Mohammed Shia’] al-Sudani is finally chosen again [following the recent elections] as the leader, then it’s very likely Iraq will move in this direction [to greater gas capture and reduced reliance on Iran], but if a leader emerges from the large pro-Iran faction then it just won’t happen.”
References:
Iraq's
gas breakthrough could rewrite the Middle East power map. Simon Watkins. January
5, 2026. Oil Price US. Iraq's
gas breakthrough could rewrite the Middle East power map
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