Iraq needs to step up plans to capture more volumes of flared gas to help the country's stricken power generation capacity, according to speakers at an online forum on Iraq's power sector.
To tackle the problem head on, the government must also act to improve transmission lines and fee collections by ending power poaching, which discourages investment in the sector, experts said at the Powering Iraq virtual conference this week.
They added that the country can add a further 6 gigawatts to its existing power generation output of around 17GW per annum by ending the gas flaring at the giant oilfields in the southern Basra region that has made the country among the worst polluters in the world.
Apart from providing much-needed electricity, a comprehensive gas capture programme could also deliver savings of up to $5 billion a year.
"In a nutshell, treating all the flared gas in Iraq can potentially introduce savings of $4 billion to $5 billion a year by generating 6GW," Adnan Kassab, Siemens Energy's senior vice president for power generation in the East Mediterranean region told the conference.
Demand on the rise
Furthermore, revenues from by-products such as condensate and liquefied petroleum gas enhance the attraction of gas utilisation, speakers said.
Demand is growing fast and more needs to be done to stave off severe power shortages in future, they added.
Mahmoud Hanafy, senior vice president for transmission at Siemens Energy, put the current electricity demand in Iraq at 30GW per annum, but with oly 17GW being generated, there is a gap of 13GW.
Ageing infrastructure dilemma
Apart from reducing flaring by building new treatment plants, the Iraqi government needs to also address a creaking infrastructure, with at least 8000 kilometres of transmission lines needing to be built to improve distribution, the conference heard.
Demand is projected to top 50GW by 2025.
"With all these expectations, you need to expand the grid. We need to build 8000 kilometres of transmission lines in the next four to five years," Hanafy said.
He said that up to 60% of all the produced capacity is wasted through power poaching, poor transmission and mismanagement.
Electricity theft is a major hurdle facing any foreign investor, while the government has done little to improve revenue collection and introduce badly needed structural reforms, he added.
Baghdad is now taking measures to end chronic power shortages but progress has been painstakingly slow.
Siemens Energy signed a memorandum of understanding in 2018 with the Ministry of Electricity outlining a roadmap to add 11GW of power generation capacity over four years. Hanafy said progress so far has been satisfactory in delivering the roadmap.
US engineering giant GE, which is also busy helping Iraq expand power generation through the upgrade of plants and transmission lines, also emphasised the importance of gas capture in delivering enough supplies.
"In Iraq, if we capture 30% to 40% of the gas flaring that is being done, we can deliver over 3.5GW of power that otherwise wouldn't be there with the resources available in the country," Joe Anis, GE Gas Power chief executive for the Middle East, North Africa & South Asia, told the online event.
Iraq’s Oil Minister Ihsan Ismaeel said recently that a major scheme to eliminate gas flaring is expected to be completed by 2025, way behind schedule.
He said: "80% of earmarked gas capture projects are under completion, with the exception of Ratawi, which is still in the tender process.
"We expect zero gas flaring and the stop of gas imports [from Iran] by 2025.”
His remarks provide a bleak assessment of Iraq’s progress in tackling gas flaring, since Oil Ministry officials had until recently maintained a timeline of halting flaring by 2022.
Iraq flares around 55% of its current associated gas production of 3 billion cubic feet per day.
The Shell-led Basrah Gas Company is the main driver behind the gas utilisation push, harnessing about 900 million cubic feet per day for power generation.
Iraq’s supply situation would get worse if the US succeeds in forcing Baghdad to reduce gas and power imports from neighbouring Iran, which currently supplies around 1.2GW of electricity a year and 750MMcfd that also keeps feeding the power plants.
Energy imports from Iran account for up to 30% of Iraqi power generation.
Any move to reduce them would further exacerbate an acute power shortage that keeps growing amid rising demand, poor management and political malaise which have long characterised Iraq.