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By John Lee.

Japan’s International Cooperation Agency (JICA) has told Utilities Middle East that reports that the organisation had agreed a US $2 billion loan for the construction of a new Iraqi power plant are inaccurate.

Japan’s principal overseas development agency, was reported by both KUNA and AIN to have agreed the massive loan to help finance the new 1,800 MW Nassiriyah power plant.

The organisation told Utilities-ME that the most recent Japanese Official Development Assistance (ODA) loan to Iraq was a $1.12 billion agreement for three projects in the first quarter of 2010.

This included a Water Supply Sector Loan Project to upgrade and construct water facilities to ensure potable water supplies to Anbar, Ninawa and Salah ad-Din governorates, together with the construction of the Al-Alkkaz [Akkas?] gas power plant project in Anbar.

The loan also covered the construction of the Deralok hydro-electric plant in Kurdistan’s Dohuk governorate.

(Source: Utilities Middle East)

SGS has been awarded a three-year contract by India's Lanco Group [Lanco Infratech, LANCI] to manage on-site quality control for the construction of its new gas power plant in Anbar Province, Iraq. The AKAZ [Akkaz, Akkas] power plant at al-Qaim will have a capacity of 250MW (2x 125MW) and is estimated to require three years to complete.

Under the deal, SGS will inspect material and equipment on-site, as well as at manufacturer locations in Europe, the US, Asia and the Middle East region.

Lanco signed the agreement to build the plant in June 2011.

(Sources: SGS, Utilities-ME)

Iraq's Oil Minister, Abdul Kareem Luaibi [Elaibi], has held talks with his Syrian counterpart Sufian Allaw (pictured), according to the Syrian official SANA news agency.

The talks focused on reopening the old Iraqi oil pipeline and enhancing cooperation between the two ministries.

The two sides also discussed the possibility of benefiting from the gas available from the Akkas field, near the Syrian border, in addition to cooperation in oil exploration.

In May 2010, Allaw and Luaibi conferred on shipping the Iraqi crude oil and gas through the Syrian territories using the Kirkuk- Banias pipeline.

The Iraqi minister arrived in Damascus on Saturday in a delegation headed by Iraqi President Jalal Talabani.

(Source: Xinhua)

Iraq's oil ministry has signed a final deal with Korea Gas Corp. (KOGAS) to develop its Akkas gas field in the western province of Anbar, according to Reuters.

Along with Kazakhstan’s KazMunaiGas, KOGAS won the rights to develop the Akkas field during Iraq’s third energy bidding round last October. But KazMunaiGas pulled out of the deal in May, forcing KOGAS to double its share in the project.

"Development of Akkas gas field will provide a source of power generation and open the way for establishing a promising petrochemical industry," said Ahmed al-Shamma, Iraq's deputy oil minister, during a signing ceremony on Thursday.

The signing of the Akkas deal was delayed for months by a dispute between the Iraqi government and provincial officials in Anbar, which included the issue of possible gas exports to Syria.

Anbar's deputy governor said his province has made demands as a condition for backing the deal, including building a power station near the field, a gas pipeline to supply a nearby thermal power station and the processing of gas inside Iraq.

"Definitely if these demands are met by the oil ministry, the Akkas project will get support from people of Anbar province," Fouad Chetab, the deputy governor, said at the signing ceremony.

Abdul-Mahdy al-Ameedi, director of the Iraqi oil ministry's contracts and licensing directorate, told Reuters that, under the terms of the contract, surplus gas produced from Akkas could be processed in Syria.

"It will not be acceptable to shut down the field if gas produced from Akkas overcomes (the) capacity of the gas processors we have. Under the deal, gas could be sent to the nearby Deir al Zour gas processor in Syria," Ameedi said.

Iraq has said the priority for the gas will be domestic consumption, mainly for power generation, but has left open the possibility of allowing exports once domestic needs are satisfied. Akkas has the country's largest with reserves of gas, with 5.6 trillion cubic feet.

According to Iraq Oil Report, the company must pump 400 million cubic feet per day within seven years, and maintain that output for 13 years. It will earn costs plus $5.50 for each barrel of oil equivalent produced.

(Sources: Reuters, Iraq Oil Report, Associated Press)

Iraq's cabinet has approved a contract with South Korea's KOGAS to develop the Akkas [Ukaz] gas field in western Anbar province, the country's largest, according to a report from Reuters.

The cabinet approved the deal on Sept. 13 and the source said it will be signed Oct. 15.

"Final signature of Akkas gas deal with Kogas will take place Oct. 13," Sabah Al Saidi, deputy head of the Iraqi Oil Ministry's petroleum contracts and licensing directorate, told Dow Jones Newswires.

Iraq asked KOGAS to develop Akkas on its own after Kazakh company KazMunaiGas pulled out.

(Sources: Dow Jones, Reuters, AKnews)

Lanco Infratech Ltd. (LANCI) of India signed an $81.3 million contract to build a gas-fired, 250-MW power station in western Iraq.

Masaab Serri, an Electricity Ministry spokesman, told Bloomberg that the company is scheduled to build the plant within 16 months in Al-Qaim, in Anbar province in western Iraq, using natural gas from the nearby Akkas field, which the Iraqi government has recently awarded to Korea Gas Corp (KOGAS).

The country sought bids this year to build more than 60 generation plants to add more than 14,000 megawatts to the national grid. Iraq currently produces 7,000 megawatts and imports 1,000 megawatts while domestic demand totals about 14,000 megawatts, Iraqi Electricity Minister Raad Shallal said in April.

(Sources: Dow Jones, Bloomberg)

Reuters reports that Iraq signed the final contracts on Sunday to develop its Siba and Mansuriyah gas fields in deals involving Turkish, Kuwaiti and South Korean companies that will help diversify the country's fossil fuel production.

The Korean Gas Corporation [KOGAS] signed the deal for the Akkas gas field earlier in the week.

"This is a new beginning for the Iraqi energy industry as it is the first time we are developing Iraqi gas fields. We are seeking to meet the needs of our power stations and to make Iraq one of the leading exporters of gas in the world," Oil Minister Abdul-Kareem Luaibi [Elaibi] said at the signing ceremony in Baghdad.

• Akkas, near the Syrian border, is the largest of the three fields at 158bn cubic metres, and it went initially to a joint South Korean-Kazakh bid from the Korean Gas Corporation [KOGAS] and Kazakhstan company KazMunaiGas. KazMunaiGas later pulled out of the project, and KOGAS took over its stake. It will produce 400 million standard cubic feet of gas a day at a price of $5.50 per barrel of oil equivalent.
• The Mansuriyah field in the volatile Diyala province in central Iraq, which stretches east to the Iranian border, has been won by Korean Gas Corporation [KOGAS], Turkey’s TPAO and Kuwait Energy. It holds around 127bn cubic metres of gas. They committed to produce 320 million standard cubic feet of gas a day for $7 per barrel of oil equivalent produced, the maximum the government would agree to pay.
• Siba, on the Kuwaiti border south of Basra, is by far the smallest of the three fields at only 2.9bn cubic metres. Kuwait Energy and TPAO won the bidding here, agreeing to produce 100 million standard cubic feet of gas a day at a price of $7.50 per barrel of oil equivalent. TPAO has said the partners expect to invest $1 billion in the Siba field.

(Sources: Reuters, Bloomberg)

Iraq signed an agreement with the Korea Gas Corporation (KOGAS) to begin developing the Akkas natural-gas field, an Oil Ministry official said, ending seven months of delays in progress at one of the country’s biggest deposits of the fuel.

Representatives of KOGAS and Iraq's Ministry of Oil signed the contract on Wednesday in a ceremony closed to the media, Sabah Abdel Kadhim, the deputy head of the Oil Ministry’s licensing department, said in a telephone interview with Bloomberg.

KOGAS agreed to double its stake in the project to 75%, up from 37.5% previously, following KazMunaiGas's unexpected withdrawal. Iraq’s state-run North Oil Company will hold the other 25%.

The government expects to sign agreements for two other gas fields at Mansouriya and Siba on June 5.

(Sources: Bloomberg, Reuters)

KOGAS, the Korea Gas Corporation, will double its commitment to develop Iraq's Akkas gas field, according to a report from the Wall Street Journal.

The move follows the withdrawal of its partner, Kazakhstan state gas company KazMunaiGas, from the project.

Kogas, will now have a 75% stake in one of Iraq's largest gas projects, up from 37.5% previously. Iraq's state-run North Oil Company will hold the other 25%.

The company plans to invest about $2.66 billion in the Akkas project over a 20-year period, a company official said. But that estimate is based on an assumption that Kogas keeps the entire 75% stake in the project, the person said.

After a final signing of the contract with Iraq takes place, expected next month, Kogas may find a new partner to help develop the 3.3-trillion-cubic-foot gas field, Kogas said in a filing.

The signing of the contract had been delayed twice since KazMunaiGas and Kogas won the right to develop the gas field last year because of disputes with provincial authorities in Anbar province, where the field is located.

In April, Iraqi Prime Minister Nouri al-Maliki visited Seoul and agreed for South Korea to have the priority right to at least 250,000 barrels a day of crude oil during any emergency that upsets the global supply-and-demand balance, equivalent to about 10% of South Korean daily crude imports.

(Source: Wall Street Journal)

We reported last week on the withdrawal of the Kazakhstan-based KazMunaiGas from negotiations on the Akkas gas field in Anbar province.

This week the head of KMG, Askar Balzhanov, shed more light on the background to the company's decision, and it reflects very poorly on the Iraqi authorities:

"One of the reasons for our withdrawal from the Akkas project in Iraq is that the local authority, where the field is located, and the central government of Iraq had different points of view on the project. And this disagreement caused our withdrawal."

While the nature of the internal wrangling has long been known, it is significant that a major international company has chosen to make public the fact that political bickering is costing the country and its people money.

It can be argued that politicians at the parliamentary level have put their differences aside in the national interest in order to form a government, but it is also undeniable that the result is a bloated cabinet that took far longer to put together than anyone thought reasonable.

One economist estimates that nearly $500 billion has been lost over the past eight years in the oil sector alone, due to poor public sector administration standing in the way of progress.

It's clear that Iraq needs more statesmen and fewer politicians.