By John Lee.
The former head of the Energy Studies Department at the Opec Secretariat in Vienna has said that delays in capturing associated gas from Iraq’s oilfields is costing the country billions of dollars.
Saadallah Al Fathi told GulfNews.com that the Basra Gas Company (BGC) is very slow in rehabilitating and maintaining the plants at North Rumaila and Khor Zubair.
The Basra Gas Company (BGC) is a $17.2-billion joint venture set up in November 2011 to gather and process gas from the three southern oilfields of Rumaila, West Qurna 1, and Zubair; it is owned by the Iraqi South Gas Company (SGC) (51%), Shell (44%) and Mitsubishi (5%).
“Only in April 2014 did the company award the technical studies of a new gas plant in Ratawi of 500 mcfd capacity, which would cost $2 billion. But it is too little compared with gas production now assuming current facilities are completely rehabilitated.
“By the time the plant is ready, it will probably be five years from now and gas flaring would continue. Iraq probably needs four of such plants if flaring is to be avoided and electricity demand is satisfied.
“This is what prompted the IEA in June 2012 to say that the implied value of the gas flared to 2020 would be $70 to $100 billion and that ‘This lost value provides a compelling reason for Iraq to move as quickly as it can to make early additions to gas processing capacity’.”