Istanbul: Iraq, which loses $5 million a day by burning off associated gas, should speed up improvements so that it’s no longer one of the world’s biggest gas-flaring polluters, a World Bank official said.
Flaring of associated gas in Iraq has risen to 10 billion cubic metres a year from 3 billion in 1994 as the country increased oil production, putting it in fourth place behind Russia, Nigeria and Iran, according to Fabrice Mosneron Dupin, adviser at the Sustainable Energy, Oil, Gas and Mining Division of the World Bank-led Global Gas Flaring Reduction initiative.
“In the last two, three years it has increased by about 1 billion cubic meters per year, every year,” Dupin said on Tuesday in Istanbul, where he was attending Iraq 2011: Future Energy, a conference organised by The Energy Exchange.
The country will be able to alleviate the problem through a gas-capture agreement it’s due to sign with Royal Dutch Shell, he said. Captured associated gas can feed power stations in Iraq, where widespread shortages and rationing are hobbling the economy and reconstruction efforts.
Dupin said he plans to meet officials in Iraq next week on ways to reduce flaring. The country should implement regulations and pricing systems that can provide incentives as well as penalties to help reduce gas flaring, most of which takes place in the south, he said.
Iraq, which holds the fifth-biggest natural-gas reserves in the Middle East, ranks first in the world in flared gas as a percentage of production, he said.
“Iraq flares more than half the gas it produces,” he said. “This is a terrible figure.”
A failure to take steps to reduce flaring in Iraq would erase all gains made worldwide to reduce such polluting effects in the last five years, according to Dupin. Global gas flaring decreased by 22 per cent to 134 billion cubic meters in 2010 from 172 billion cubic meters in 2005, according to figures on the World Bank website.
Shell, Europe’s largest energy producer, has been in talks with the Iraqi government since 2008 to set up a venture to capture flared gas and signed a preliminary agreement on July 12 for a $12.5 billion project, the first step toward easing power shortages in the war-torn country.
The company is ‘eagerly’ waiting for the Iraqi cabinet to sign a go-ahead for the project, Hans Nijkamp, the company’s country chairman for Iraq, said at the conference.
Captured gas from the oilfields of West Qurna-1, Rumailah and Zubair will mainly serve the domestic market, and may be exported if the Iraqi government decides, Nijkamp said.
The start-up of the project has been pushed back from June 2010, when the government approved the creation of Basra Gas, a venture in which state-owned South Gas will take a 51 per cent stake, with Shell holding 44 per cent and Mitsubishi the rest.