Questions haunt the Iraqi gas agreement with Iran.. Are there solutions to the electricity crisis?

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Economy News - Baghdad
[rtl]A few days ago, Iraq signed an agreement with Iran under which it would import 50 million cubic meters of gas per day over a period of 5 years, which raises several questions about the reasons for this step, even though it is a country rich in gas and oil.[/rtl]

[rtl]What is the production volume?[/rtl]

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[rtl]Iraq has gas reserves estimated at 131 trillion cubic feet, ranking it 11th in the world according to the US Energy Agency. However, poor infrastructure reduced the daily production capacity by half, to about 1.5 billion cubic feet of associated gas.[/rtl]
[rtl]The remaining half is left to burn in the air, causing a loss of millions of dollars and increasing global warming emissions, in a country threatened by a real crisis due to climate change, according to the United Nations.[/rtl]
[rtl]The largest gas production projects are led by the Basra Gas Company, which is a joint venture between the Iraqi government, which owns 51%, Shell (44%) and Mitsubishi of Japan (5%).[/rtl]
[rtl]In addition to this huge project, the remaining production is carried out through some small stations spread in the south of the country.[/rtl]
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[rtl]Where is gas used?[/rtl]

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[rtl]Iraq currently produces 27 thousand megawatts of electrical energy through stations that operate mostly on gas, but the production capacity sometimes decreases to 17 thousand megawatts.[/rtl]
[rtl]At its maximum, this quantity does not meet the country's need for electricity, as Iraq needs to increase production to reach 40,000 megawatts in order to ensure the provision of energy throughout the day.[/rtl]
[rtl]To fill this gap, Baghdad has resorted to importing about 50 million cubic meters from its neighbor Iran since 2017. Since 2017, Iranian gas supplies have reached more than 52 billion cubic meters, with a value of more than $15 billion, according to statements by Iranian Deputy Oil Minister for Gas Affairs Majeed Jakni. .[/rtl]
[rtl]Reliance on unstable Iranian gas, in addition to geopolitical complications such as US sanctions on Tehran, and internal security such as “sabotage operations” and attacks on the electricity network, caused repeated power outages in the country, which in 2021 turned into bloody protests.[/rtl]
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[rtl]Why is Iran cutting supplies?[/rtl]

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[rtl]Since former US President Donald Trump withdrew from the nuclear agreement with Iran, the re-imposition of sanctions has exacerbated the difficulties of importing energy from Tehran.[/rtl]
[rtl]Although the United States is pressuring Baghdad to end its dependence on Iranian gas, the lack of prepared infrastructure and the inability of production to cover domestic demand prompted Washington to grant Iraq extensions of exemption from sanctions, allowing the country to complete import operations. The last extension, which bore the number 22, was last March.[/rtl]
[rtl]As a natural result of the sanctions, Baghdad is facing difficulty in paying the financial amounts owed to Iran, while the latter resorts to cutting or reducing supplies as a means of pressure, which reduces the country's ability to produce electricity and is forced to cut off electricity to citizens.[/rtl]
[rtl]Last June, Iraq paid in full the debts for natural gas purchases from Iran, according to statements by the head of the National Iranian Gas Co., which were reported by the state-run Shana news agency.[/rtl]
[rtl]These statements come after the Iraqi Ministry of Foreign Affairs announced fundamental arrangements with the United States regarding dropping the sanctions that prevented Iraq from paying about $2.7 billion owed to Tehran in exchange for the shipments.[/rtl]
[rtl]But Iran's benefit from these funds is limited. Under US sanctions, Iraq's payments for Iranian gas can only be disbursed from accounts restricted in Iraq, with permission from the United States, for Iran to purchase its humanitarian needs.[/rtl]
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[rtl]Are there solutions?[/rtl]

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[rtl]To solve the electricity crisis, Iraq is resorting to increasing production from its gas fields in order to achieve self-sufficiency by 2030. There are many projects that are supposed to enter the production network soon.[/rtl]
[rtl]Among these projects is the gas processing station in the Halfaya field in the south, which is being implemented by the Chinese company CNBC and is expected to begin production this year, at a rate of 500 million cubic feet per day.[/rtl]
[rtl]There is also a project under implementation with a completion rate of 47% with Baker Hughes to establish a gas liquefaction plant in Nasiriyah, a project that exploits gas from the Gharraf and Nasiriyah fields.[/rtl]
[rtl]Other projects include the gas processing station in Ratawi, which is a project carried out by the French company Total Energy at a cost of $4 billion, with the aim of producing 600 million cubic feet of associated gas per day, which aims to collect gas from the Ratawi field and other neighboring fields.[/rtl]
[rtl]In addition to the above, the UAE company “Crescent Petroleum” signed a gas production project from the Khashm al-Ahmar and Jalabiyat Kamar fields in Diyala, with the aim of producing 250 million cubic feet per day in mid-2025 as the first stage.[/rtl]
[rtl]In the Kurdistan region of Iraq, the Khor More field, operated by the UAE company Dana Gas, produces about 500 million cubic feet per day of gas, which meets the region’s need.[/rtl]
[rtl]The federal government in Baghdad is trying to obtain 100 million cubic feet per day from this field to operate the Kirkuk station in northern Iraq. But the negotiations have not yet reached any result.[/rtl]
[rtl]This is not the end of the list of projects that Iraq seeks to develop with the aim of enhancing production, but there are some projects that have been halted since ISIS took control of a large area of ​​the country in 2014, which led to the withdrawal of the companies operating them, such as the “Crutch” fields in Anbar. Which contains a reserve estimated at 6 trillion cubic feet, and "Mansouriya" in Diyala, which contains a reserve estimated at 4.5 trillion cubic feet.[/rtl]
[rtl]Aside from production, last March the Ministry of Oil signed a memorandum of understanding with Siemens and Schlumberger to invest in treating and stopping the burning of gas from oil fields, which could help the country exploit gas and convert it into useful energy used to generate electricity.[/rtl]
[rtl]In addition to these solutions, Baghdad is looking for new sources of gas, such as Qatar and Turkmenistan, and has also signed agreements with Saudi Arabia, the Gulf Cooperation Council countries, and Jordan, to obtain electricity by connecting the national grid to the networks of these countries.[/rtl][/size]

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Added 04/02/2024 - 11:47 AM
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