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2021-05-04 12:00:00

IRAQ NEED INVESTMENT $15 BLN

IRAQ NEED INVESTMENT $15 BLN

PLATTS - 03 May 2021 - Iraq is seeking to spend, with certain energy partners, $15 billion to boost its gas production, the country's oil minister said May 3, as OPEC's second largest producer works on reducing reliance on Iranian energy imports. 

The investment on these projects will help boost gas production to 4 Bcf/d, allowing the production of as much as 16 GW of electricity, Ihsan Ismaael announced during a press conference broadcast by Qatari news channel Al Jazeera.

These projects include a $3 billion development plan for Basrah Gas Co., which Ismaael disclosed at the press conference.

Basrah Gas Co., which counts Shell, Mitsubishi Corp. and Iraq's state-owned South Gas Co. as shareholders, will boost its production to 1.4 Bcf/d from the current 1 Bcf/d by 2025 at a cost of $3 billion, Ismaael said. The ultimate plan for Basrah Gas is to reach 2.4 Bcf/d of gas production over an unspecified period.

Shell has a 44% stake in Basra Gas, which captures associated gas from the southern Iraqi oil fields to produce electricity. South Gas Co. has a 51% stake and Mitsubishi Corp. 5%.

US PRESSURE

Iraq is under increasing US pressure to lower its reliance on Iranian gas and electricity, which are needed to avert acute power outages, especially during the summer when temperatures can soar to 50 C. Since 2018, Iraq has been receiving US waivers to continue to import Iranian energy, which are subject to sanctions that were re-imposed by Washington that year.

Iraq also expects to wean itself off Iranian gas exports by 2024-25 as it speed ups projects to boost domestic gas production, Ismaael said April 22.

Federal Iraq mainly relies on gas produced with oil, which is subject to OPEC+ quotas that restrict the ability to provide feedstock for power generation. Gas that is produced is also mostly burned, making Iraq the world's second-worst flaring country after Russia in 2020, according to the World Bank.

Iraq is speeding up gas treatment projects in order to boost gas production.

TOTAL PROJECTS

The oil ministry signed this year a memorandum of understanding with Total for developing associated gas and solar power projects at an estimated cost of $7 billion. The gas projects will be developed in two phases and include the production of 600 MMcf/d.

The ministry also awarded in April Chinese state-owned Sinopec a contract to develop the 4.5 Tcf Mansuriyah gas field in the eastern province of Diyala, which Ismaael said on May 3 would cost around $2.1 billion. Sinopec will have a 49% stake in the project, which will include the initial production of 50 MMcf/d of gas to be boosted to 300 MMcf/d.

The oil ministry is also in talks with US companies and other investors to develop the Akkaz gas field near the border with Syria, the minister said at the press conference. The technical discussions have been slow, but the project envisages an investment of $3 billion to produce 300 MMcf/d.

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