Q: How much raw associated gas is Iraq currently producing? Will new processing capacity be added this year? How will you overcome the delays at Nasiriya and Gharaf fields?
A: In 2023, the volume of raw associated gas produced averaged 3.12bn cfd. Gas treatment averaged 1.92bn cfd, meaning gas utilization reached almost 62%. Dry gas produced at processing plants, in addition to [raw] volumes directly injected into the network, stood at 1.5bn cfd.
In 2024, we are expecting additional processing capacity to come from the 300mn cfd Halfaya project in Maysan province in early March. This will eventually provide more than 200mn cfd of dry sales gas in addition to 1,000 t/d of LPG production in its first phase, increasing to 2,250 t/d through the second phase.
The LPG will be supplied to Maysan and other nearby provinces, and this will in turn increase the volumes of LPG exported by BGC. The latter will also add 200mn cfd of processing capacity through its second BNGL unit.
With regards to the Baker Hughes gas processing project for the Nasiriya and Gharaf oil fields, negotiations are ongoing between South Gas Company (SGC) and Baker Hughes to determine a final date for the commissioning of the project. There are some obstacles faced by the companies delivering the project, and if there are delays then the gas will be captured [upstream] and minimally treated, through dehydration and compression, then injected into the dry gas network to reduce waste and flaring.
Q: You have mentioned BNGL’s second unit. BGC commissioned the first unit in stages last year (MEES, 25 August 2023). The second unit was supposed to begin commissioning in Q1, but we have not heard updates recently. Are there any delays?
A: The first unit was commissioned last year with 200mn cfd capacity. The second 200mn cfd unit will be commissioned, as clarified by BGC, on 1 November 2024 in order to ensure that all required engineering and mechanical checks for the project’s equipment are conducted utilizing the gas volumes allocated from the first round’s oil fields – Rumaila, Zubair and West Qurna-1.
Q: Securing full gas volumes from Iraq’s first licensing round fields is proving challenging, how will you ensure the full utilization of BGC’s eventual processing capacity?
A: BGC and its partner SGC utilize the flared gas from the first licensing round fields through decisions and recommendations set by the [joint venture’s] High Management Committee (HMC) so as to fully utilize the available capacity.
For 2026 and 2027, the plan is to install new compressors to utilize more gas volumes by increasing pressure. The plan is based on instructions by Oil Minister and Deputy PM for Energy Affairs, Hayan Abdulghani, to prioritize gas processing at oil fields where gas pressure is low.
These instructions also entail processing some gas from oil fields that have been allocated to TotalEnergies’ [Ratawi gas hub] project by utilizing BGC’s available processing capacity. This will include flared gas at the Majnoon oil field on a temporary basis until the start-up of TotalEnergies’ project in end-2027. This is to ensure flared gas reduction as well as securing additional dry gas for power generation plants.
Q: Finalizing the $27bn megadeal with TotalEnergies is seen as a positive signal for investment in Iraq’s oil and gas industry (MEES, 14 July 2023). With the 600mn cfd Ratawi gas hub sitting at the heart of your plans to rely on domestic gas and reduce imports, what’s the progress here?
A: The Development and Production Contract (DPC) with Total became effective on 16 August 2023 after approval by Basrah Oil Company (BOC) and SGC. Currently, it [Ratawi gas hub] is at the FEED stage which is being delivered by US firm KBR. Design completion is currently progressing at 70%.
Determining routes for gas feedstock pipelines, and those for [evacuating] products, is ongoing. Based on current parameters, the project’s first 300mn cfd phase is expected to finish construction and begin commissioning by the fourth quarter of 2027. As for the second 300mn cfd phase, this will follow in two years. LPG production will be approximately 3,500 t/d and 15,000 b/d of condensate.
Q: Speaking of pipelines, bringing gas to the Ratawi hub from the six Basra fields will require building upstream and midstream facilities. This is a huge job, is it part of Total’s scope of work or will it be tasked on the ministry’s subsidiaries?
A: These projects will [mainly] include building compression stations and pipelines from the fields allocated to TotalEnergies (Ratawi, Majnoon, West Qurna-2, Tuba, Luhais and Subba). The projects are under the jurisdiction of Total and its national partners, BOC and SGC, and they will commence once the engineering designs [for the Ratawi hub] are completed.
Q: Iranian pipeline gas imports have been intermittent and unreliable in recent years (MEES, 19 January). They nonetheless, continue to be key for Iraq’s power generation. What volumes are being imported from Iran currently?
A: In 2023, the volumes imported from Iran averaged 902mn cfd via the southern and middle pipelines. That said, the contractual volumes agreed were around 1.4bn cfd.
Q: The government is keen to diversify its gas and energy imports. PM Sudani approved building an LNG terminal at the under-construction Fao Grand Port recently. How developed is this idea?
A: The PM has instructed the oil ministry and other state entities to take measures to build the permanent LNG import platform at the Fao Grand Port. Specialized and well-qualified international advisory firms are to be contracted to study the project in full detail. A high committee at the ministry, and other technical ones, have been created as well. The ultimate objective of this project is to diversify gas feedstock sources to power plants and industrial projects.
Q: The Ministry of Electricity has held talks – and signed an initial agreement – with Turkmenistan to import gas via Iran. What is the status of this project?
A: This issue is within the remit of the ministry of electricity, although the oil ministry did attend several meetings on the matter. The prices offered by the Turkmen side have been studied as well. But as it stands, the project has yet to be finalized and it remains tied to Iran and Turkmenistan reaching an agreement.
Q: There is also a gas surplus at Kurdistan’s 500mn cfd Khor Mor gas field. I believe the Ministry of Electricity is negotiating a purchase contract with UAE’s Dana Gas. How much gas is expected to come from Khor Mor and when?
A: Yes, there are ongoing negotiations by the electricity ministry in relation to buying 100mn cfd from Khor Mor and feeding the volumes directly to power plants. Currently, the Ministry of Electricity and a committee are studying a draft of the [gas sales] contract.
*Interview conducted by MEES Editor Yesar Al-Maleki