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Iraq expects uptick in gas production

10 March 2023

Iraq is expecting gas production to increase this month as progress is made with projects to gather associated gas and reduce flaring, according to the country’s Oil Ministry.

During a visit to Umm Qasr Port in Basra governorate on 9 March, the Undersecretary for Gas Affairs Ezzat Saber Ismail said that the ministry is working to reduce the flaring of associated gas.

He said speeding up the implementation of associated gas-gathering projects remained a priority for his ministry.

Ismail said up to 35 million cubic feet per day (mmscf/d) of raw gas will be produced in the next phase of the country’s gas-gathering projects at the Zubair oilfield.

This will include 30 mmscf/d of dry gas, 150 tonnes of liquid gas, and 600 barrels of condensate.

Ismail also said that the ministry was keen to develop and rehabilitate the loading docks in Umm Qasr Port and to increase the port's export capacity.

During a tour of inspection of oil and gas facilities in southern Iraq, Ismail held a meeting with officials of the South Gas Company (SGC) and Basrah Gas Company (BGC),  where he was briefed about plans and programmes to benefit from the associated gas projects in the southern Iraqi governorates.

Five-year plan

In November last year, BGC said it was aiming to ramp up its capacity to gather gas from oil facilities over the next five years, increasing volumes to 1,400 mmscf/d.

The increase in capacity was mainly expected to be achieved by completing the planned Basra Natural Gas Liquids (NGL) project, which includes the construction of an integrated gas investment plant comprising two units, each with a capacity of 200 mmscf/d.

In a statement published on the oil ministry’s website, the minister said that the project was expected to boost capacity by 200 mmscf/d over the next five months. The Basra NGL extraction plant project has a value of $170m.

At the time, he said that the five-year target will be achieved through the execution of gas gathering projects at the Zubair and West Qurna oil fields.

By processing increased volumes of associated gas, Iraq’s gas gathering projects will supply fuel to local markets and reduce the oil facilities’ negative environmental impact.

Reducing flaring

Iraqi oil fields routinely burn off associated natural gas when they produce oil instead of collecting and processing it to be used as a fuel or feedstock for petrochemical facilities.

This practice, called flaring, causes environmental damage and has negative health implications for nearby communities. Iraq has been the world’s second-biggest gas-flaring country after Russia for years.

In 2021, Iraq flared a total of 17.9 billion cubic metres of natural gas, emitting 47.71 million tonnes of carbon dioxide, according to World Bank data. Some analysts say this underestimates the true extent of the problem.

If the natural gas had been captured and sold instead of flared, it would have made revenues of more than $2bn, according to a Word Bank estimate.

In June 2021, the International Finance Corporation (IFC) announced it had acted as lead arranger for a five-year $360m loan to BGC to help it carry out one of the world’s largest gas flaring reduction projects.

The IFC is part of the World Bank Group and offers investment, advisory and asset management services to encourage private sector development in less developed countries.

BGC is a public-private joint venture of Iraq’s state-owned South Gas Company, the majority shareholder, UK/Dutch Shell and Japan’s Mitsubishi.

BGC is using the IFC loan to execute a series of projects that will gather increasing gas volumes from southern Iraq oil fields.

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Wil Crisp

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