Iraq burns ten times the gas imported from Iran and loses billions

Iraq burns ten times the gas imported from Iran and loses billions

10-12-2020

Iraq burns ten times the gas imported from Iran and loses billionsResearcher Shatha Khalil *

Humankind knew oil and natural gas about 5000 years ago, and the latter is lighter than petroleum, because it forms a layer higher than the oil layer, and it is a gas that covers petroleum, where it accompanies and accompanies it, and for this it has been called the associated gas.
The history of the gas industry in Iraq, at the commercial level, dates back to 1927, and despite the fact that Iraq possessed a huge wealth of natural gas associated with the production of crude oil and free gas in terms of the large volume of proven and potential reserves, the production of marketed natural gas is not commensurate with the total production. Of natural gas, and not commensurate with the large reserves that Iraq possesses, as well as the decline in the level of the gas industry in Iraq and its low ability to convert natural gas into gaseous products that enhance the added value of this industry and the momentum of other industries and sectors.

Natural gas is becoming increasingly important as a green energy source and can fuel economic growth in many parts of the world today, and for decades into the future.
Liquefied natural gas provides less polluting natural gas from production areas far from the market, where additional imported supplies are needed.
The market flexibility of LNG is helping to improve the security of supplies around the world, and these are just two catalysts for LNG to be one of the fastest growing energy markets in the world, with demand expected to more than double, reaching about 480 million tons per year (MTA). Over the next twenty years.
Iraq ranks eleventh among the countries in the world rich in natural gas, after Russia, Iran, Qatar, Saudi Arabia, the Emirates, America, Nigeria, Venezuela and Algeria, and its proven reserves amount to about 112 trillion cubic feet.
As for the total reserve of free gas, it is 32.7 trillion cubic feet, which represents 25% of Iraq’s gas reserves, and this does not include many areas of Kurdistan invested in recent years, and it is hoped that its ranking will progress, if the recent developments are taken into account, and when it completes its explorations, especially in Deeper layers, which have been disrupted for decades by the unstable security situation.

Gas flaring has risen to levels not seen in more than 11 years, to about 150 billion cubic meters, which is equivalent to the total annual gas consumption in sub-Saharan Africa, according to recent data.
A report issued by the World Bank attributed the increase in gas flaring by 3%, to rise from the level of 145 billion cubic meters during 2018 to about 150 billion cubic meters during 2019, due to the increase in flaring in the United States, Venezuela and Russia.
The reason for burning quantities of associated gas is to extract oil, as the pipes cannot absorb it, or because there are no pipes at all.
The companies say that this procedure, known as “burning” or “ignition,” is the most environmentally friendly to get rid of surpluses that cannot be sold, because methane, if left un-burned, would have been more dangerous to the environment than burning that produces carbon dioxide. .
In burning associated gas, the name of Iraq is prominent, which ranks second in the burning of associated gas in the world, after Russia, despite its chronic shortage of energy and the frequent interruptions of the electric current that many citizens live in Iraq, yet Iraq is the second largest country The world is burning gas associated with oil.
And the US Energy Information Administration indicated that Iraq has ignited 629 billion cubic feet of natural gas, as natural gas is being burned due to insufficient pipelines and other infrastructure in the water.
According to the International Energy Agency, the amount of gas that Iraq ignites is sufficient to supply energy for at least 3 million homes.
According to World Bank data, the Iraqi oil fields ’lack of gas collection equipment leads to the burning and waste of 18 billion cubic meters of” petroleum-related gas “annually.
It is estimated that burning gas associated with oil costs Iraq about $ 2.5 billion annually, or the equivalent of 1.55 billion cubic feet of gas per day, or 10 times the amount it imports from Iran, and it is worth noting that Iraq has a proven strategic reserve of natural gas estimated at limits 3.6 trillion cubic meters, surpassing by a large margin the gas reserves of neighboring Iran, but gas production in Iraq has slowed significantly over the past decade, as the ministry has focused more on the country’s main source of financial resources, represented by the oil production sector.
Deliberate waste .. Foreign oil companies were not interested in investing the gas associated with oil production in Iraq when oil was discovered in the Baba Karkar field in Kirkuk in 1927, and since that time, the associated Iraqi gas has been wasted by burning, in addition to the closure of many gas wells in some fields, including: Kormor, Chamchamal, and Khashem Al-Ahmar.
Interest in the use of natural gas began to be limited in the late 1950s.
In the 1960s, the Iraqi government worked on building important projects to invest gas in Basra, including the Najibiya power plant and the fertilizer plant in Abu Al-Falus, the paper mill in Nahran Omar and the Shuaiba power station.
The actual interest in gas in Iraq continued in the seventies of the last century, as this period was described as golden, for gas investment in Iraq, whether on the production side through the National Oil Company, or on the consumption side through the Ministry of Industry and the General Electricity Corporation, and the construction of new projects continued until years. The first of the eighties, despite the circumstances of the war with Iran.
“The value of gas waste in Iraq is estimated at 45 billion dollars annually as a result of burning gas associated with oil extraction, while the increase in gas burning operations increased with the increase in oil production from 3 to 4.5 million barrels per day, while burning increased from 13.3 billion cubic meters to 17.8 billion cubic meters per day by the year 2017, and Iraq must develop a plan to stop this deliberate waste, because we are in an era of modern technology and good financial capabilities, in addition to the lack of planning, corruption and failure that transforms the wealth and preserving the wealth of the country.
Some specialists mention that the processing capacity of associated gas burning operations in Iraq was in 2002 a little more than 16 billion cubic meters, which is the same as the rest so far, as the average gas statistics in Iraq indicated a production of 19.2 billion cubic meters and a consumption of 7.3 billion cubic meters Between the months of September 2008 to June of 2017, which means that the waste burning process amounts to 11.9 billion cubic meters, or 62% of the production, or the value of 196 thousand barrels of oil per day.
Despite the price of a barrel of crude oil at about $ 70, the wasted resource of gas is worth $ 45 billion annually, which is enough to build a completely new gas industry in Iraq.
In sum, Iraq has enormous wealth that is wasted and burned daily, and it was possible to invest that wealth to develop the Iraqi economy, especially with the increase in global demand for gas by 1.6% annually until 2024, supported by consumption in China, which constitutes more than A third of the demand growth, and the Iraqi state should give the sector special attention to rehabilitating the electric power generation sector by inviting international companies to help rebuild the infrastructure for this sector.

Economic Studies Unit

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