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Iraq Moves To Exploit Its Massive Natural Gas Reserves

Official estimates are that Iraq’s proven reserves of conventional natural gas amount to at least 3.5 trillion cubic meters (tcm), or about 1.5 percent of the world’s total, placing Iraq 13th among global reserve-holders, with around three-quarters of this figure comprising associated gas that is found in the same reservoirs as oil. The International Energy Agency, though, estimates that ultimately recoverable resources will be considerably larger, at 8.0 tcm, of which around 30 percent is thought to be in the form of non-associated gas. Despite these huge potential gas resources, Iraq has made little substantial progress over the years on developing this potential either for associated or non-associated gas, mainly flaring the former and overlooking the latter. Last week, though, a heads-of-agreement deal was announced with French oil and gas giant, Total, to jointly work on four major projects that include developing the associated gas sector. 

Part of the multi-billion dollar deal, according to Iraq’s Oil Minister, Ihsan Abul Jabbar, will involve the building of a facility to produce natural gas at the five southern Iraq oilfields of West Qurna 2, Majnoon, Ratawi, Tuba, and Luhais, and this is expected to produce at least 300 million standard cubic feet of gas per day (mscf/d) and double that after the second phase of development. The agreement between Iraq and Total follows the signing of a memorandum of understanding on 27 January to develop various large-scale projects, including associated gas developments in Ratawi in the south, Diyala in the east, and Anbar in the northeast. Total already has ongoing experience of working across Iraq, holding a 22.5 percent stake in the Halfaya oil field in Missan province in the south and an 18 percent stake in the Sarsang exploration block in the semi-autonomous region of Kurdistan in the north. 

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The other key elements in this heads-of-agreement deal will be Total’s involvement in the construction and operation of a 1,000-megawatt solar energy plant and a project that will utilize redirected and reprocessed seawater to boost the pressure at oil fields to counter declining output yields. In this latter regard, according to Iraq’s Oil Ministry, Total will focus on treating around 2.5 million barrels of seawater per day and focusing these efforts on boosting output from Ratawi, and the Zubair, West Qurna 2, Majnoon, and Rumaila. This would appear to be an attempt by Total to gauge whether or not to take over the entire Common Seawater Supply Project (CSSP). 

The CSSP – which involves exactly the same methodology as the project for which Total has tentatively signed up – has long been regarded as unwieldy, expensive, and prone to extreme reputational risk for any company taking it over due to the endemic corruption in the country. In its entirety, the CSSP is intended to take and treat seawater from the Persian Gulf and…

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2021-04-05 19:00:00

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