Gas Condensate Exports – a New Beginning for Hydrocarbon Industry?

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

Do gas condensate exports represent new beginning for Iraq’s hydrocarbon industry?

Iraq exported its first shipment of gas condensate on March 20, from the port at Khor al-Zubair to Fujairah in the United Arab Emirates (UAE). Hamed Zubai, undersecretary at the Iraqi Ministry of Oil, reported that the Iraqi Oil Marketing Co. had arranged for the 10,000-cubic-meter consignment, and the Basrah Gas Co. had successfully exported the shipment.

“Due to surplus exceeding local consumption, gas condensate exports will continue. In addition, the ministry seeks to export other types of associated gas-processing products,” Zubai said during a March 20 news conference. He did not mention potential export destinations.

“Exporting condensate opens the door for the state to secure added financial returns, driven by the fact that the global price per ton is around $350.” What does this development mean, and does it represent a new beginning for the gas industry in Iraq?

Whereas natural gas refers to gaseous hydrocarbons that accumulate in porous sedimentary rocks and consist mainly of methane, gas condensate refers to a natural gas liquid recovered from gas wells that consists mainly of pentane. Iraq is one of the world’s richest countries when it comes to natural gas.

Citing the Oil & Gas Journal, the US Energy Information Agency (EIA) reported that as of January 2015, Iraq had proven gas reserves of about 112 trillion cubic feet, ranking it 12th globally in total volume of reserves. The EIA estimates that about three-quarters of Iraq’s natural gas resources are of the associated type, meaning that they are located deep underground and mixed with oil. In contrast, neighboring Iran and Qatar have nonassociated gas, which is not mixed with petroleum.

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