Iraq: Iraq Has Lost Billions from Gas Flaring

Feb 15, 2015 | Saadallah Al Fathi, gulfnews.com
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In June 2012, the IEA estimated that the implied value of the gas flared in southern Iraq to 2020 would be $70 to $100 billion and that, "this lost value provides a compelling reason for Iraq to move as quickly as it can to make early additions to gas processing capacity." In November 2011, the Iraqi South Gas Company, Shell and Mitsubishi established a joint venture, the Basra Gas Company, with the goal of processing up to 2 billion cubic feet a day of gas.

However, as of the third quarter of 2014, gas utilisation is probably not more than 40 per cent of the 1,050 mcfd capacity of the two gas processing plants of North Rumaila and Khor Zubair. At the same time BGC was slow to initiate new gas processing facilities to cope with the increase in gas production. Only in April 2014 did the company award the technical studies of a new gas plant in Ratawi of 500 mcfd capacity, which would cost $2 billion.

Unfortunately, this new plant is too little compared with gas production now assuming current facilities are completely rehabilitated. By the time the plant is ready, it will probably be five years from now and gas flaring would continue. Iraq probably needs four of such plants if flaring is to be avoided and electricity demand is satisfied.

This suggests that the Basra Gas Company (BGC), a joint venture between has been very slow in rehabilitating, maintaining, and building the plants necessary to recoup the billions lost in gas flaring.

If Iraq needs this money and is concerned about the quality of life of its people, it should work day and night to provide additional gas processing and infrastructure to make the gas available to all power stations and other industries.