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Iran's deputy oil minister has said gas exports to Iraq has reached 7-8m cubic metres per day and will increase as demand is growing, the official Islamic Republic News Agency (IRNA) reported on July 28.

Hamid Reza Araqi (pictured), who is also the head of the National Iranian Gas Company (NIGC), said Iraq has suggested an increase in gas imports from Iran.

An increase in gas production, as well as boosting the country's capacities, will allow a rise in gas exports.

According to IRNA, Iran started exporting gas to Iraq on June 21 after a long pause.

The report cited security problems in Iraq as a result of armed insurgencies, had prevented gas exports before then.

The two countries have signed two contracts based on which Tehran is delivering gas to Baghdad and the Iraqi city of Basra in the south. IRNA also pointed out that Iraq continues to face severe electricity shortages and its power plants are in need of Iran's gas.

IRNA forecasts gas exports to Iraq will increase to 35m cu.m p/d in the future.

(Source: GardaWorld)

By John Lee.

The London Court of International Arbitration ("Tribunal") yesterday released its First Partial Final Costs Award, dated 17 July 2017 in the Arbitration between Peal Petroleum Company Limited, Dana Gas PJSC and Crescent Petroleum Company International Limited (the "Consortium") –v- The Kurdistan Regional Government of Iraq ("KRG").

The Tribunal ordered the KRG:

• to pay US$ 14,046,485 to the Consortium within 28 days, together with interest at LIBOR + 2% from the date of the Award; and
• to bear 85% of the LCIA Arbitration fees and Tribunal's fees and expenses up to 27 November 2015 amounting to GBP 403,055.97.

The Costs Award relates to the legal costs incurred by the Consortium up to 27 November 2015.  The legal costs incurred in the Arbitration after this date will be the subject of further Costs Awards from the Tribunal in due course.

This additional order of the costs follows the 1st, 2nd and 3rd partial final awards already received on, 2 July 2015, 27 November 2015 and 30 January 2017.

The quantification of the damages for the Delayed Development Claim by the "Consortium" will be determined by the Tribunal at a further hearing scheduled to take place in September 2017.

In a statement, Dana Gas said that it and its consortium partners have invested over US$1.2 billion so far and produced over 150 million barrels equivalent of gas and petroleum liquids, which has had a transformative positive effect on the local economy in the Kurdistan Region and in particular in providing gas to fuel affordable electricity supply.

They reiterate their continued commitment to the KRG and to the people of the Kurdistan Region and all of Iraq, and hope that any outstanding matters with the MNR will be resolved, amicably and in good faith, in the shortest possible time.

(Source: Dana Gas)

The United Nations Development Programme (UNDP) estimates that more than $700 million will be needed to rehabilitate Western Mosul, in addition to the $370 million required in the Eastern part of the city.

The Deputy Special Representative of the United Nations Assistance Mission for Iraq (UNAMI), and UNDP Resident Representative in Iraq, Ms. Lise Grande (pictured), told The Fiscal Times:

"Based on the first damage and loss assessments, we estimate that $470 million is needed to help restore the main electricity, water and sewage grids and rehabilitate key public facilities including hospitals, schools and houses in the most heavily damaged neighbourhoods in western Mosul.

"A minimum of $237 million is required in the moderately and lightly destroyed districts. This is double the amount we originally estimated for western Mosul and is in addition to approximately $370 million required for the stabilization of eastern Mosul."

She added that Eastern Mosul is already recovering, with 230 projects in progress under UNDP's Funding Facility for Stabilization (FFS).

Of the 54 residential neighbourhoods in western Mosul, 15 are heavily damaged, 23 are moderately damaged, and 16 are lightly damaged. UNDP is already active in the lightly damaged districts: 70 projects have started, and hundreds more are being planned.

Full interview available here.

(Source: UNDP)

GE has said it is supporting Iraq to develop its electricity infrastructure, working closely with the Ministry of Electricity to set up the Mansurya Power Plant in Diyala. Earlier, while still in its construction phase, the facility had been partially damaged during the conflict in the area and progress towards project completion had stalled.

The site is now expected to generate up to 720 megawatts (MW) of electricity powered by four units of GE’s GT13E2 gas turbines, each with a capacity of up to 180 MW under International Organization for Standardization (ISO) conditions. Two units have already been successfully synchronized to the national grid and the GE team at site is working to commission the other two units.

Musaab al-Mudarris, the official spokesman of the Iraqi Ministry of Electricity, said:

“Our primary focus is on rebuilding and strengthening the country’s electricity infrastructure, especially in light of the surge in demand during the summer season. Several power plants, including Mansurya, were damaged, resulting in the need for the fast mobilization of advanced technologies to restore them and recommence operations.

"GE’s advanced technologies and technical support in rebuilding and powering-up the plant have come at a significant time. This will go a long way towards enhancing the well-being of our people and supporting local businesses and industries.”

During the rebuilding process, GE worked with the Ministry to provide gas turbines that offer industry-leading efficiency in their segment. The GT13E2 gas turbines are an excellent fit for the Mansurya plant in delivering efficient supply of electricity to meet peak summer demand. Moreover, if converted to combined cycle configuration, the power plant could operate at an efficiency of up to 55 percent.

Following extensive discussions, the Iraqi Ministry of Oil and Baker Hughes, a GE company (BHGE) signed a contract for fast-track solutions to help the recovery of flare gas in line with the country’s strategy for energy sector development.

An advanced modular gas processing (NGL) plant has been recommended for Nassiriya as part of the initiative by Baker Hughes, which is the first and only company in the world to provide a full-stream offering covering products, services and digital solutions for the oil and gas sector, from upstream to midstream and downstream.

As per the agreement, Baker Hughes, will develop advanced solutions for flare gas at the Nassiriya and Al Gharraf oilfields, using modular gas processing technology developed in the United States, with the project to be undertaken in two stages. In the first stage, the advanced modular gas processing solution will be deployed to dehydrate and compress flare gas to generate over 100 million standard cubic feet per day (MMSCFD) of gas.

The Nassiriya plant will then be expanded to a complete natural gas liquid (NGL) facility to recover 200 MMSCFD of dry gas, liquefied petroleum gas (LPG) and condensate. The project will create direct and indirect jobs for Iraqis and help grow the local supply chain requirements that support Iraqi small and medium enterprises.

The modular solution will also support power plants with dry gas for efficient power generation, thus helping meet the growing demand for electricity using clean fuel. The project will also contribute to curtailing the amount of gas flared in the fields of Nassiriya and Gharraf that otherwise goes to waste.

The hundreds of thousands of tons per year of LPG and condensates produced will help meet the domestic demand for cooking gas. The surplus LPG and condensate will be exported, generating high revenue to the Iraqi government. Contributing to the social and economic development of Nassiriya, the project is aligned with the vision of the Ministry of Oil and the government.

His Excellency Jabbar Al-Luaibi, the Iraq Minister of Oil, said that the Ministry is moving ahead to implement its strategic plans to secure financial revenue to the treasury of the Iraqi state and to develop the oil industry. The statement came at the ceremony hosted by the Ministry to sign a contract for the project to invest in an optimum solution to recover flare gas in the fields of Nassiriya and Gharraf with Baker Hughes.

Rami Qasem, President, MENAT and India, Baker Hughes said:

“The Iraqi Ministry of Oil has outlined a clear vision and strategy to maximize the utilization of natural resources, especially gas. As a full-stream company that combines physical and digital strengths to increase reliability and uptime across the entire spectrum of oil and gas development, we bring advanced solutions that can support in transforming the industry and contribute to all-round development through our in-country investments in Iraq.

"We are committed to supporting the Ministry of Oil in its strategic goals, and in deploying advanced flare gas solutions and to build the country’s oil and gas infrastructure. From industrial to economic and environmental benefits our solutions will create long-term value for the country.”

Last year, BHGE had signed a first-of-its-kind partnership agreement with the Ministry of Oil to strengthen the performance of the Iraq energy sector by providing advanced equipment, technology upgrades, maintenance of the Ministry of Oil fleet and ensuring knowledge transfer, skills development and local jobs.

BHGE has also strengthened its localization initiatives in Iraq with the expansion of its technical services facility in the North Rumaila oilfield. It offers a wide range of testing, repair and refurbishment services for its customers in the country as well as undertakes fabrication and assembly of key products establishing BHGE as a complete technical solutions provider.

With three offices in Iraq - Baghdad, Erbil and the Basra – GE continues to deliver its latest technology and expertise to local customers. The company has more than 350 employees currently, nearly 95 per cent of them Iraqi professionals.

(Source: Baker Hughes)

The United Nations Development Programme (UNDP) and Sulaimaniyah Governorate completed the rehabilitation of the main water network providing safe drinking water to hundreds of thousands of people.

UNDP’s Iraq Crisis Response and Resilience Programme (ICRRP) and Sulaimaniyah Governorate repaired key components of the main pipeline that transfers water from Dukan Lake to Sulaimaniyah Governorate. Pumping stations and a treatment plant were also rehabilitated to help alleviate water shortages and ensure an adequate supply of clean water to households in the Governorate.

At a ceremony on 5 July 2017 marking the completion of the project, Governor of Sulaimaniyah H.E. Omer Ahmed Amin, said:

“In Sulaimaniyah, one in every eight residents is an internally displaced person. The influx of displaced people is putting considerable pressure on public services, in particular water, electricity, health, and education. This project is providing a key service to all women, men and children in Sulaimaniyah.”

The Head of the Consular Office of Japan in Erbil, Mr. Moriyasu Katsumi, said:

“Japan is honoured to be a partner of this important project. We are delighted to see that all inhabitants of Sulaimaniyah, including internally displaced people and Syrian refugees, will equally benefit from improved access to the water supply.”

UNDP’s Programme Manager for ICRRP, Ms. Mizuho Yokoi, noted:

“Water is essential for life. We are glad we contributed to such an important basic service project focused on improving the well-being of vulnerable communities. We thank the Sulaimaniyah Governorate for their cooperation and the Government of Japan for the generous contribution which made this project possible.”

The first step to recovery, after a crisis, is ensuring people have access to basic services. UNDP’s ICRRP is supporting local authorities to deliver services that are fundamental to daily life. Over 2.4 million people in Iraq have access to improved basic services like water, electricity, health, education, sewerage and roads thanks to UNDP.

(Source: UNDP)

Marking a key milestone in Fallujah’s recovery, the Government of Iraq and UNDP’s Funding Facility for Stabilization (FFS) re-opened Al Azrakiyah Water Treatment Plant, which provides safe water to more than 60% of the city.

The rehabilitation of the plant was one of the key projects requested by the Anbar Command Cell, which is responsible for stabilizing newly liberated areas.

The team working on the plant repaired the destroyed pump station and supplied key equipment, including water pumps and generators. All of the plant’s buildings and more than 40,000 square meters of land was cleared of explosive hazards by the United Nations Mine Action Service (UNMAS).

Nearly one year after the liberation of Fallujah, the stabilization of the city is well underway. Hundreds of thousands of people have returned home, basic services including water and electricity have been restored, and the local economy is picking up.

Since August 2016, more than 100 stabilization initiatives have been supported in Fallujah through UNDP’s Funding Facility. Grids have been repaired, public infrastructure re-opened and  thousands of people, many from destitute families, have worked on public schemes, earning income while they helped to rebuild the city.

UNMAS’ partner has cleared almost 2 million square metres of land and infrastructure contaminated with explosives including five power plants, 12 health facilities, 13 sewage sites, 19 water points, and 88 schools.

At a ceremony marking the re-opening of the water treatment plant on Thursday, Sohaib al-Rawi, Governor of Anbar, said:

“The newly rehabilitated Al Azrakiyah Water Plant is essential to the improvement of access to safe drinking water to Fallujah households. Water supply projects are critical to improve our communities’ access to safe water and functioning sanitation systems. These projects are vital for sustaining the lives and well-being of men, women and children in Anbar.”

Ms. Lise Grande, UNDP Resident Representative for Iraq said:

“This is a symbol of Fallujah’s recovery. When we first saw the destruction at Al Azrakiyah none of us believed the water plant could be rebuilt so quickly. Everyone has worked together to get the job done in record time. The impact is huge. More than 60 percent of the city will now have safe drinking water.”

Mr. Pehr Lodhammar, Officer in Charge of UNMAS, said:

“The identification and removal of explosive hazards is the first step before stabilization initiatives or humanitarian interventions can take place in liberated areas. In Fallujah almost two million square meters of contaminated areas were cleared allowing stabilization activites to begin, and enabling families to return to Fallujah and to resume their lives.”

Established in June 2015, FFS is working in newly liberated areas in Anbar, Salah al-Din, Ninewa Diyala, and Kirkuk Governorates. More than 1,000 projects are completed or being implemented across 23 locations. Since the start of the crisis, over 1.8 million people have returned to their homes.

(Source: UNDP)

IMF Team Reaches Staff-Level Agreement on Second Review of Stand-By Arrangement with Iraq

The Iraqi authorities and an International Monetary Fund (IMF) team reached a staff-level agreement on the second review of the Stand-By Arrangement (SBA) that was approved by the IMF Executive Board on July 7, 2016 (See Press Release No. 16/321).

The SBA aims to restore fiscal and external balance and to improve public financial management while protecting social spending.

Iraq completed the first review under the SBA on December 5, 2016 and received a disbursement of SDR 0.46 billion (US$0.6 billion) (See Press Release No. 16/540). Completion of the second review will release a further disbursement of SDR 0.6 billion (US$0.8 billion).

Mr. Christian Josz, Mission Chief for Iraq, issued the following statement today in Amman:

“The Iraqi authorities and the IMF team have reached agreement on a supplementary budget for 2017, objectives for the 2018 budget, and strengthened procedures to keep expenditure under control. Both the supplementary 2017 budget and the 2018 budget will keep the fiscal consolidation, necessitated by the fall in oil prices, on track, while protecting social spending.

“Once agreed prior actions have been implemented, the IMF Board could consider the second review of the SBA in August.

“During the discussions, the team met with Acting Governor of the Central Bank of Iraq (CBI), Dr. Ali Mohsen Ismail Al-Allaq, Deputy Chief of Staff of the Prime Minister, Dr. Naufel Al-Hassan, Chairman of the Board of Supreme Audit, Dr. Salah Noori Khalaf, Acting Deputy Finance Minister, Ms. Taif Same, Deputy Minister of Planning, Dr. Qasim Enaya, Deputy Minister of Electricity, Mr. Abdel Hamza, Financial Adviser to the Prime Minister, Dr. Mudher Saleh, and officials from the ministry of finance, Central Bank of Iraq (CBI), the Board of Supreme Audit, the ministry of oil, the ministry of planning, the ministry of electricity, and a representative from the Kurdistan Regional Government. The team would like to thank the Iraqi authorities for their cooperation and the open and productive discussions.”

(Source: IMF)

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

The Iraqi government is committed to keeping the Mesopotamian Marshes on the UNESCO World Heritage List. Located in the southern part of the country, the marshes were added to UNESCO's list in July 2016. Previously listed Iraqi World Heritage sites are the city of Ashur, the city of Hatra, the Erbil Citadel and the city of Samarra.

Although the Iraqi parliament voted to put an end to encroachments against the marshes May 14, many fear the possibility of Iraq's losing its position on the World Heritage List and being denied the international recognition that would have been of great benefit for the country, especially since previously agreed-upon service and construction programs were not established.

First off, there are concerns about the Water Resources Ministry's continuing to build settlement islands in the Chibayish marshes, south of Dhi Qar, which UNESCO considers to be a clear violation of the conditions the marshes need to meet in order to stay on the World Heritage List.

In this context, Ajial al-Musawi, the chairman of the Committee on Tourism and Antiquities in Dhi Qar’s provincial council, told Al-Monitor over the phone that UNESCO’s objection is to the nature of the mechanisms used in building these islands in the marshes since they pose a direct threat to biodiversity in the area.

Musawi said, “The government’s reluctance to implement the programs it promised worries us, and we fear the marshes would lose the chance to join the World Heritage List for good, especially since a UNESCO delegation is scheduled to visit us in the coming months.”

Prime Minister Haider Al-Abadi received the Saudi Arabian Minister of Energy, Industry and Mineral Resources, Khalid bin Abdul Aziz al-Faleh, and his accompanying delegation in his office on Monday.

During the meeting, they discussed boosting cooperation in the oil sector, industry, petrochemicals, electricity, minerals, trade and banks, as well as reviewed cooperation to support OPEC oil prices.

His Excellency Prime minister Dr. Haider Al-Abadi stressed the importance of expanding bilateral steady cooperation for the benefit of the two countries which would lead the region to a comprehensive development beneficial for all.

The Minister of Energy Khalid Al-Falih conveyed the greetings of the Saudi King and the officials in the Kingdom , their blessing for the achievement of Iraq's victories, pointing out that to the importance of Iraq's role in the region and the strenuous steps taken in all fields.

The Minister of Energy Khalid Al-Falih expressed the readiness of the Saudi companies to cooperate and invest in Iraq and Saudi's market desire to obtain Iraqi products.

(Source: Media office of the Prime Minister)