. Energy News .

Iraq seeks to harness vast gas reserves
by Staff Writers
Baghdad (UPI) Sep 9, 2011

Iraq is moving toward harnessing its vast natural gas reserves to fuel its power stations and export the surplus, ending the wasteful process of flaring off 70 percent of the gas recovered from oil fields.

Spearheading this effort is a $12 billion deal with Royal Dutch Shell and Japan's Mitsubishi Corp. to capture the huge volumes of gas -- more than 874 million cubic feet a day -- flared off in the giant southern oil fields of Rumaila, Zubair and West Qurna Phase 1.

The two companies will form the Basra Gas Co. with the state-owned South Gas Co.

In addition to proven oil reserves of 144 billion barrels, Iraq has known natural gas reserves of 110 trillion cubic feet, plus another 150 trillion in probable reserves.

The landmark deal, which Baghdad hopes will open up new joint ventures to utilize natural gas in other oil zones, was proposed in 2008 but three years later it's still not been finalized.

Many aspects of the deal remain dogged by uncertainty and controversy. That underlines the tortuous process for such ground-breaking ventures in post-war Iraq, where political fighting between rival political and ethnic groups paralyze the decision-making process on vital projects.

Oil Ministry officials said in July that Shell, Mitsubishi and Iraqi authorities had settled legal issues that delayed the deal for two years, along with political opposition and haggling over gas pricing.

Shell will hold a 44 percent stake in the venture and Mitsubishi 5 percent, with the South Gas Co. owning 51 percent.

The deal now awaits the approval of Parliament and Prime Minister Nouri al-Maliki's government.

Industry analysts say, given the political squabbling in Baghdad, there's nothing to suggest the venture will get the green light any time soon despite its importance in the government's declared drive to modernize and upgrade its energy industry and boost electricity generation in a country plagued by blackouts.

"This is one step in a long process and the next step could be as long as a piece of string," one Western official told the Financial Times.

"A deal is in the government's interests, so it should be earlier rather than later, but at the moment we just don't know."

Several key elements remain unclear, including costs and intended level of gas production.

In a recent presentation to lawmakers, the Oil Ministry listed a production level of 2 billion cubic feet per day. But it's not known whether this is the initial or average production.

The Middle East Economic Digest, published in Dubai, quoted consultant Ahmed Mousa Jiyad, as saying, "There seems to be some ambiguity about what this production capacity means and how realistic its suggested scale is."

That, he said, "would lead to more uncertainty regarding the feasibility."

MEED observed: "The parliamentary oil, gas and natural resources committee held a number of hearings in July and August, with expert testimony on what the deal means for Iraq.

"Questions have been raised on the transparency of the agreement, its feasibility and crucially its cost. The Oil Ministry will have to present a credible response for the project to move forward."

There's another hiccup: security.

A senior security official in Basra warned recently that Iraqi authorities right now are hardly able to ensure the protection of vital energy infrastructure in the south, where 65 percent of the country's oil reserves lie because of a lack of manpower and advanced security equipment.

Developing the infrastructure to handle the planned gas projects, considered so vital to rebuilding the economy after decades of wars, rebellions and international sanctions, will only add to the security problem in the south.

The energy industry suffered heavily during the insurgency that followed the U.S. invasion of March 2003 and the toppling of Saddam Hussein's brutal regime.

It remains a vulnerable target, a danger that will heighten as U.S. forces move toward completing a military withdrawal by Dec. 31.

In June, the Zubair 1 oil storage facility in the south was set on fire in a spate of bombings. Soon after, four bombs were planted -- but found and defuse -- at the Doura refinery south of Baghdad, with a capacity of 240,000 barrels per day

Earlier, Iraq's largest refinery at Baji was bombed and put out of action for several days.

Related Links
Powering The World in the 21st Century at Energy-Daily.com


Get Our Free Newsletters Via Email
Buy Advertising Editorial Enquiries

. Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle

PEW study urges Canada to suspend Arctic oil exploration
Montreal (AFP) Sept 9, 2011
An environmental group urged Canada Friday to suspend oil exploration in the Arctic, warning that otherwise it risks an environmental disaster worse than the BP spill in the Gulf of Mexico. The PEW environmental group said in a report that it does not necessarily oppose developing the oil and gas reserves at the top of the world, but called on Canada to become "Arctic ready" and urged reform ... read more

Brussels seeks more say over energy deals

Google gives glimpse into 'cloud' energy use

Uncertain trends mar Argentine energy plan

Japan to lift power-saving decree earlier than planned

Iraq eyes 3 mln bpd oil output by year-end: minister

Slovakia, Hungary agree on gas pipeline

Nate leaves two Gulf oil workers dead, one still missing

Polymer from algae may improve battery performance

First market report on High Altitude Wind Energy

Researchers build a tougher, lighter wind turbine blade

Wind Power Now Less Expensive Than Natural Gas In Brazil

BMW to power Leipzig factory by wind energy

New type of solar cell retains high efficiency for long periods

Germany keen to buy solar-generated electricity from Greece

CPV conference hopes to further technology

Calisolar opening new facility to expand solar silicon production

Westinghouse In Collaborative Effort to Supply Nuclear Power Plants In China and United States

UN nuclear chief calls for post-Fukushima action

Russia says ready for more nuclear cooperation with Iran

Iran nuclear plant to fully power up by March

Hog waste producing electricity and carbon offsets

Scotch whiskey waste fuels biomass plant

Biofuels Make a Comeback Despite Tough Economy

Farming commercial miscanthus

Tiangong 1 might be launched in late September

Chang'e-2 moon orbiter travels around L2 in outer space

China State media says Tiangong 1 to launch in early Sept

Time Limits for Tiangong

Number in need of help in East Africa rises to 13.3 mln: UN

Clouds affect, don't start climate change

Record drought keeps grip on U.S. states

World needs to do more against desertification: Algeria

Memory Foam Mattress Review
Newsletters :: SpaceDaily Express :: SpaceWar Express :: TerraDaily Express :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

The content herein, unless otherwise known to be public domain, are Copyright 1995-2011 - Space Media Network. AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement