Shatha Khalil *
Natural gas contributes about a quarter of the energy consumed in the world that is the cleaner or less fuel emissions, an important source of thermal, mechanical and electrical energy in transportation, industry, electricity and housing sectors.
Many countries take advantage of this energy and invest it properly as it is part of its revenues that it depends on the gas wealth , such as Russia, Qatar and Iran , as well as raw material for petrochemical industries and for the production of pesticides and materials , agricultural production and protein foods; therefore, the gas represents the most important sources for the alternative energy of oil , and , less types of the fuel of the cost of energy product , and natural gas is characterized as a lighter than air by 40% and goes up to fade into the atmosphere when it is leaking .
Iraq occupies the eleventh place among the world countries that are rich of natural gas after Russia, Iran, Qatar, Saudi Arabia, UAE, America, Nigeria, Venezuela and Algeria, and proven reserves of which amounted about 112 trillion cubic feet.
The history of the gas industry in Iraq, on a commercial level dates back in 1927, and although Iraq possesses a huge wealth of associated natural gas with the production of crude oil and free gas in terms of the large volume of proved and probable reserves, but the production of marketed natural gas is not commensurate with the total production of natural gas and is not commensurate with what Iraq possessed of large reserves, as well as a decline in the gas industry in Iraq and the decline in its ability to convert natural gas into gaseous products to enhance the added value of the industry and the momentum power of industries and other sectors.
Foreign oil companies did not care to invest associated gas with oil production in Iraq when the discovery of oil in the Baba Gurgur field in Kirkuk in 1927, and since that time the Iraqi associated gas is wasted by burning, in addition to the closure of many gas wells in some fields, including: Kurmur, and Chamchamal, and Kashm al-Ahmar.
The interest in using natural gas was limited in the late fifties.
The Iraqi government has worked in the sixties on the construction of important projects for gas investment in Basra included Najibiyah power plant and fertilizer plant in Abu al-Filos and paper factory at Nihran Omar o and Shuaiba power plant.
It seemed that a real interest in natural gas was started in the seventies in Iraq, as this period was described as a gold phase for the gas investment in Iraq, both in the production side through the national oil company, or on the side of consumption through the Ministry of Industry and the General Electricity Corporation and the building new projects has continued until the early years of the eighties, despite the circumstances of the war with Iran.
, And the National Oil Company has implemented in the eighties the the giant South Gas Project with a capacity of 1050 Mqmq (million standard cubic feet) per day and then the project of North gas.
And a national network of gas was set up that it extends from the south to Baghdad and the center to meet the northern network to Kirkuk , while providing the necessary of gas from both directions, and subsequently it was carried out the project of underground storage of liquid gas in Kirkuk ,
And in the industrial side , it has been built power stations al-Nasiriyah -alharth -khor Al-zubair- and Najaf, Hilla – complexes of fertilizers, petrochemicals –Iron and Steel -at Khor Al – Zubair and the plants of cement in Samawa and Najaf and Kubeesah and Other projects for the investment of gas .
The eighties also saw the export of dry gas and gas liquids from Rumaila to the State of Kuwait as well as the export of liquid gas by Tankers to neighboring Jordan, Syria and Turkey.
Production:
produces of natural gas in Iraq from two main areas , they are the northern region and southern region, and production of natural gas has seen similar changes to changes in oil production because most of the quantities produced from natural gas are from the associated gas with oil. Most of the product of natural gas was not used due to the lack of facilities for processing, and in the beginning of eighties it was built and run the assemblers of south and north gas, which led to a rise in investment of natural gas production from 11.4% in 1980 to 88.7% in 1998.
The ratio at the same time the production of marketed natural gas was increased from 1.3 billion cubic meters a year to 5.5 billion cubic meters between 1980 and 1998, but the year 2002 saw a decline in the production of marketed natural gas to 2.36 billion cubic meters and then continued falling to one billion cubic meters in 2004. The ratio of investment of natural gas has been decreased to its lowest level due to the suspension of gas treatment plants affected by the events witnessed by Iraq since 2003, but it rose slightly as a result of the rehabilitation of some facilities and complexes of natural gas.
Iraq marketed about 1.1 billion cubic meters / year in 2009, which is equivalent to 0.04% of the total marketed natural gas in the Arab world.
There are two complexes for treatment and processing of natural gas in Iraq , the first in Kirkuk and the second in Basra:
North Gas Company
It has been founded the general facility for the gas industry in the northern region based on the repealed resolution “the Revolutionary Command Council No. 1400 – in 1/9/1980 and law of regulating the Ministry of Oil number . (101) of 1976, and its amendments , and on the basis of “Article (7) of the companies Act No. 22 of 1997, it was founded the North gas company (a public company) and as” from 01.06.1998.
The company aims to address amounts of raw associated gas with crude oil production in the northern fields and converted into derivatives of the following products:
– dry gas: using as a clean fuel and easy to use in power plants and plants of cement and many industrial companies in northern and central Iraq and used raw material in the fertilizer and petrochemical plants .
– Liquid gas: is used as fuel for domestic purposes for domestic consumption and export.
– Natural gasoline: – is used as fuel or improved after injecting with crude oil to improve its specifications.
– Sulfur: is used as a raw material in a number of local industries and export the surplus outside Iraq.
The designing capacity of the North Gas Company amounted 15 million cubic meters / day of natural and acid gas , and consists of a linear of production identical in energy. The complex building was completed in the mid – eighties, and aims to produce approximately 8.11 million cubic meters per day of marketed dry natural gas , and 735 thousand tons per year of propane gas and 448 thousand tons of butane gas , as well as 384 thousand tons per year of natural gasoline and 528 thousand tons per year of sulfur.
The complex includes eight stations to compress natural gas, and transportation of it from the production stations to gas plant through a pipeline network with a length of about 250 km.
South Gas Company:
South Gas Company was founded in 1979, and despite the growing importance of natural gas as an important source of energy, the gas sector has not received enough attention since the size of burned gas (non – investor) amounted to large amounts that reflects the great waste of this wealth noting that a large part of that is due to slow maintenance operations of gas facilities in Basra, as the complex of manufacture of gas and gas Compressor Stations (CBS) was badly damaged in the events of 2003 which led to the deterioration of production capacity to below one – third of what it was in the past decade, the number of gas isolating stations in Basra , 29 stations and the South oil company provides the Notorious gas at a rate of 292 million standard cubic feet daily.
The total design capacity of the South Gas Company is about 29.7 million cubic meters per day. The company comprises three main units to isolate of natural gas liquids, (NGL) and the first unit is located at the North Rumaila gas plant , and is pumped fluid south to complex of gas of Khor Al – Zubair to complete the stages of processing and separation of its components, Khor Al – Zubair gas plant contains two removal of natural gas liquids second and third , as well as units of fluid segmentation for the production of propane, butane and naphtha, and the laboratory processing of natural gas production associated with the southern Rumaila field and other producing fields and adjacent to it.
The company also includes refrigerated warehouses for storage of propane gas and tanks for the storage of butane gas, as well as naphtha and within the company’s facilities a port for the export of such products which is located on the Khor Abdullah on the Arabian Gulf. And natural gas produced from the South Gas Company is marketed to southern network of the gas distribution and transportation, as a mixture of the propane and butane is pumped to LPG network, and naphtha is pumped to oil refineries in Basra.
Basra Gas Company was established in 2010 with the participation of the South Gas Company by 51% and Shell 44% and Mitsubishi 5% and the project includes the unit of liquefied gas production with a capacity of (600) cubic meters per day , where it is financed entirely by the foreign partner.
Shell and the South Gas company began at work on a number of early projects to produce more of dry gas available for electric power generation, thereby reducing the amount of energy derived from the network in addition to extracting more LPG and currently Iraq imports 1,200 tons per day of petroleum gas LPG while it burns with 4000 tons per day.
In light of these developments , experts believe that gas projects are on the table firmly on the priorities of the Iraqi government, to take advantage of the huge gas wealth that Iraq sits on , which are no less important than the oil wealth, according to experts working in the gas industry, said Iraq is capable of producing more than 6000 million standard cubic feet of associated gas, enough to cover domestic consumption and export , but production does not exceed 1,000 million standard cubic feet, including nearly 700 million cubic feet per day are burned in the fields of Basra.
Iraq is facing a real problem at the moment because of the Iraqi gas burning, which causes the accumulation of 20 million tons per year of carbon dioxide emissions, while Iraq still imports cooking gas from abroad and unable to generate electricity from gas for adoption to the traditional alternatives, such as diesel.
Iraq burns daily 700 million cubic feet of gas
, a spokesman for the oil ministry, Asim Jihad said in a press statement, that ” the items imported by Iraq from gas goes to gas stations for electric power generation, since 2003 , Iraq is burning amounts of gas up to 700 million standard cubic feet per day but the number is decreasing, because of the growing investment of companies producing gas, “he said .” the Ministry of Electricity has decided to import gas stations without consulting the Ministry of oil. ”
A project under study completely stop is the Arab gas project , which will carry gas from Akkas fields in Anbar province through Syria to the Turkish border and then to Europe, and all of these projects have now been halted, but future projects are achievable, if well prepared plans are available carefully for cooperation on completion among people with common interests around the world , despite all the difficulties and acts of military violence in Iraq and the fall of the land , however , in the hands of extremist organizations.
Economic losses of gas in Iraq in 2016 according to an analytical study of an expert Asri Moussa, an oil and gas industry expert in Iraq indicating
that more than 1.5 billion cubic feet of gas is burning every day in southern Iraq in 2016 and this means the loss of 1200 million cubic feet of dry gas, 0.7500 tons liquid gas, and 650 tons of natural gas noting that all these losses per day.
The total amount of gas burned for the period 2011 – 2015 has reached to 2220 billion cubic feet.
When calculating the price of gas during this period, the rate of $ 7 per million British thermal units, which means the unit is typical energy of about 1055 Gul. Defined as the amount of energy needed to heat 1 pound of water one degree of Fahrenheit. This is the total loss of funds $ 15.5 billion, could be used to build schools, hospitals and residential units.
The daily losses, which means electricity and cooking gas loss, indicate that the loss of 1200 million cubic feet of dry gas per day means a loss of 6,000 megawatts of electricity.
And that the loss of 7,500 tons of liquid gas means a loss of 600 thousand gas cylinder for cooking every day.
As for environmental damage to burn 1.5 billion cubic feet gas per day, leading to the production of 44 million tons of carbon dioxide per year, the equivalent of emissions from more than 7 million vehicles on the road.
The estimates of Iraq’s annual losses worth billions of dollars, in addition to environmental pollution, noting that there are in Iraq proven reserves of gas amounting to 112 trillion cubic feet of natural gas, according to the statement of Minister of Finance in April 2017 Abdel-Razzaq al-Essa, as Iraq occupies the eleventh place among the nations of the world rich in natural gas after Russia, Iran, Qatar, Saudi Arabia, UAE, America, Nigeria, Venezuela and Algeria, and proven reserves of which about 112 trillion cubic feet. The total reserves of gas associated with 98.3 trillion cubic feet, representing 75% of the total reserves of natural gas.
The total reserve of free gas is the 32.7 trillion cubic feet, representing 25% of Iraq’s reserves of gas, not including many of the regions of Kurdistan invested in recent years, it is hoped to advance its ranking, if they calculated the latest developments, and when his explorations are completed, especially in deeper layers, which were disrupted for decades because of the deteriorating security situation and the war against Daesh, which is estimated to occupy fifth place then.
Iraq seeks for the development in the field of gas through its participation in the Third Gas Exporting Countries Forum summit (GECF) held in Tehran, as the participation of Iraq now with the role of an observer, and works to occupy a site of a member with full membership to contribute with the rest of the countries producing and exporting gas to the development of this sector and benefit from it.
Note that the Forum countries took possession for 70% of the world ‘s gas reserves, and 45% of its production, and 85% of its trade and 40% of its supply lines, as the percentage of natural gas investment associated amounted during the year 2015 in Iraq to 50% of the produced quantities amounted of 3000 million cubic feet Daily .
There are efforts to maximize its investment, and to stop the operations of burning as a protection for the environment and to take advantage of its resources to generate electricity and make use of it in industrial, agricultural and other sectors… and already established «Basra Gas Company» that Iraq has 51% of its shares, while the two companies «Shell and Mitsubishi» owns the remaining.
Work is continuing to add new projects in each of the fields which are under development, so as to accommodate the expected of gas production associated according to the expected increase in oil production.
This includes gas investment in full and processed it to produce dry gas, liquid gas, natural gasoline, and sulfur, which will meet the needs of the growing domestic consumption and surplus for export.
To get Gas of «Ethane» will help to the development of petrochemical industries, which would make progress in a large number of associated industries.
, As well as the production of gas «methane» which is the foundation not the product of fertilizer, and can be a reflection on the development of the agricultural sector, and many others.
There is a great effort to draw «free gas» in all locations where available, and there is also a follow – up to accelerate the extraction in «Mansouria», and waiting for improved security conditions in «Akkas». Besides, there is hard work to build a network of gas pipelines and the availability of the required reservoirs and pumping stations,
and the rise of gas burning dramatically and waste more than two thousand billion cubic feet of natural gas worth more than $ 15 billion in a country that suffers from a lack of electricity and import of oil and gas products worth billions of dollars annually.
Iraq comes tenth in the world rank in terms of proven reserves of associated natural gas and solo gas, in accordance with the US energy report, where 70% of it in the province of Basra in southern Iraq.
The estimated Iraqi gas reserves amounts to more than 112 trillion cubic feet, 2/3 of which is available with oil reserves in Kirkuk and the south of bin Omar field, and Majnoon , and Halfaya in Nasiriyah, Rumaila, West Qurna and Zubair, while there is 20% of the gas reserves in areas where there are no oil fields, which are concentrated in the north, Bjmbur, and Chamchamal, and Bai Hassan, and Ajil, and Baba Karkar, and Qasim Omar, and Mansuriyah., Akkas field in Anbar.
The existence of such reserves of gas in Iraq suggests that Iraq to be the second most important wealth of carbohydrates after oil in the country, where Iraq can directly to produce it for domestic consumption first, and for the export second through the north-western ports where Turkey to join the line (Nabucco) through the gas pipeline of Iran – Europe.
Overview of the future of gas in Iraq’s 2020
to speed up the gas investment in Iraq depends on how serious cooperation between the constitutional institutions represented by the House of Representatives and the central government and local governments. As the setting of studied plans contributes to the development of gas production sector that the gas takes an important role in supplying the treasury of foreign monetary reserves.
But he faces some obstacles to investment in Iraq, including: the disorder of security situation, which negatively affects the stability of workers and their continued presence in the course of work.
Iraq is witnessing low rates of gas nutritious for the two North gas and South gas, noting that the energy planned for production in the South Gas Company , for example , actually amounting to 450 Mqmq / day, while the feeding received quantity is by 292 Mqmq / day on average, and thus the deficit in the planned feeding about 158 Mqmq / day on average; which affects the amount of the produced liquid gas per day from 2500 tons / day to 956 tons / day with a deficit of (1544) tons / day. This causes a severe deficit crisis in the amount of liquid gas prepared for the daily consumption, at this time as the burning of large amounts of l natural gas associated of oil.
Among the obstacles of gas investment also: the large number of mechanical and electrical failures, and the lack of the availability of required spare parts , which is reflected in the deterioration of routine and annual maintenance due to the oldness of equipment and devices as the useful life of them is over, which requires upgrading hardware and equipment which had become inadequate and inefficient, and they do not allocate funds for the rehabilitation and development and expansion of gas facilities, the continued cut off of power for companies and the lack of sufficient electric generators to operate the plant, which reduces the amount of planned production, and poor coordination between the oil and gas industry sector within the Ministry of oil, lack of interest in the gas wealth by the constitutional institutions and the lack of accountability about the burning of gas, there is a need for a law prohibiting the burning of gas, and encourages investment in the construction and development of the gas sector.
The solutions: we must work to speed up gas investment in Iraq and maximize it, to develop legislation that would prevent the burning of gas and requires the government to provide funds for the gas sector with a time limit to get close to zero point in the burning gas.
And to develop an effective and binding mechanism for cooperation between the oil sector and gas sector within the Ministry of Oil and the follow – up results from the parliamentary oil and energy committee and provincial councils that are exposed to damage from burning gas.
Issuing a special law to invest in the gas sector and opening up to the gas industry in the world.
It must be the establishment of a National Gas Company based on the standards of the global gas industry , backed by the federal government, parliament , local governments, government oil and gas companies and the foreign oil companies, operating in the development of oil and gas fields in Iraq are invited to cooperate and work urgently to stop gas flaring and accelerating of the investment of gas resources for the country and the construction of the modern national gas industry and catch up with the golden age of gas in the world.
The Iraqi Minister of Finance Agency Abdul – Razzaq Al – Issa announced in (APR 21.2017) that the World Bank expressed its readiness to allocate $ 9 million, to support the investment of associated gas in Iraq. And,
Al – Issa added “the World Bank is ready to provide a grant of nine million dollars to support projects and studies to invest associated gas in Iraq.”
It is noteworthy that Iraq released the first batch of material of intensive natural gas (c5 plus) the amount of ten thousand cubic meters, from the port of oil Khor Al – Zubair in Basra, to enter the global gas market after it entered the oil market since decades .
According to a spokesman for the Iraqi Oil Ministry, Assem Jihad, said the ministry appreciates the joint efforts of national cadres in the Basra Gas Company , in collaboration with Shell Mitsubishi , where the ministry aims through its immediate and future plans to the optimal investment of hydrocarbon wealth and increase and maximize financial revenues from gas resources as well as the export of crude oil .
Shatha Khalil
Translated by: Mudhaffar al-Kusairi
Unit Economic Studies
Rawabet Center for Research and Strategic Studies