Iraq to Invest in Associated Gas

By Nassir al-Hassoub for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The official spokesman for the Iraqi Oil Ministry, Assem Jihad, announced that the licensing contracts with international oil companies bound them to formulate systems to invest in associated petroleum gas, stressing that Iraq has what it takes to be on the list of countries exporting natural gas by 2019.

The Ministry of Oil and the Ministry of Electricity have been trading accusations during the past two weeks, following the decrease in electricity supplies. The Ministry of Electricity confirmed that this is due to the failure of the Ministry of Oil to meet the requirements of natural gas in thermal power plants.

Under a contract that was signed on July 22, 2013, and was the first of its kind, the Iraqi Ministry of Electricity bound the Iranian Ministry of Oil to supply it with natural gas. The agreement will provide Iraq with 5 million cubic meters of gas per day for the next three years at world market price. The contract, which is subject to renewal, is seen by Iraq as the perfect solution to the problem of round-the-clock electricity supplies for Iraqis.

“There is a problem in the quantities of natural gas associated with oil extraction,” said Jihad. In an interview with Al-Hayat he said, “Iraq has failed to invest in this wealth [i.e. associated petroleum gas] throughout the past few years. The gas is being totally burned with a waste of 700 million cubic feet [per day], which is seen as high record.”

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