Iraq to Begin Snuffing Out Flares

A look at the economic impacts from flaring shows there is much to gain from a concerted effort to reign it in.

The volume of gas currently flared in Iraq represents an estimated annual economic loss of about $2.5 billion and would be sufficient to meet most of the country’s unmet needs for gas-based power generation. It is estimated that the currently flared gas volumes would be sufficient to support an incremental generation capacity of roughly 8.5 GW.

This is particularly significant, given Iraq’s severe electricity shortages cost the country an estimated $40 billion annually (INES report, 2013). Shortages of natural gas have also led to the use of expensive and, in some cases imported, fuel, which costs the country an estimated $6-8 billion per year.

Iraq has, however, been working on gas flaring reduction for several years. It joined GGFR in 2011 and created the Basra Gas Company (BGC) in 2013, a partnership between the state-owned South Gas Company (SGC), Shell and Mitsubishi, to capture, process and monetize associated natural gas from its giant southern oil fields.

This project could eventually become the world’s largest gas flaring reduction project. In addition, a new gas processing facility to treat the associated gas from two important oil fields opened earlier this year.

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