Iraq Plans to Cut Gas Flaring to 20% Next Year to Reduce Imports

(Bloomberg) -- Iraq, OPEC’s second-largest oil producer, is planning to cut the amount of gas it burns off unproductively to about 20% next year in an attempt to meet rising demand and reduce imports.

The country captured about 67% of the gas that is produced from oil fields at the end of 2024, and new projects in the south, including by TotalEnergies SE, will help boost that further, Ezzet Saber Ismael, deputy minister for gas affairs said in an interview in Baghdad. It plans to eliminate the wasteful burning by the end of 2029 or early the following year. 

The Middle Eastern country, along with Russia, Iran and the US, have the biggest rates of gas flaring, a process that wastes the fuel instead of collecting and putting it to use in industries like power generation. Iraq has had to resort to imports, including from neighboring Iran for which it needs regular sanctions waivers from Washington. An existing permission is valid until June, Ismael said.

Flaring has been a concern around the world for years as the lack of infrastructure to take away the gas results in companies burning off the excess fuel. While an environmental hazard, it’s less potent than the alternative — venting, in which methane is released directly into the air.

Ismael said Iraq has reduced gas flaring from 47% in 2021 to about 33% this year. The World Bank’s Global Gas Flaring Tracker earlier this year shows the volumes of gas burned off remained largely stable in the five years to 2023. Iraq’s targets have also slipped in the past, following an earlier aim to end flaring by 2023.      

By the end of next year, Iraq plans to add projects that will use 290 million cubic feet a day of gas produced from oil fields in the south, Ismael said. This includes 50 million from the Artawi field by a TotalEnergies project, which will increase to 300 million by 2027, he said. 

“Only for the Artawi project, investments will be around $2 billion, a complete gas complex that we call accelerated investment that will be ready by the end of next year,” the deputy minister said. 

The country is also planning to build a liquefied natural gas import terminal in the Grand Faw port in the south, to meet demand for the fuel. It will start sending invitations in January, mainly to US companies, to compete for construction of the project. The terminal will have a storage capacity of 300,000 cubic meters.

Iraq currently produces 3.122 billion cubic feet of gas per day, of which about 1.048 billion was flared as of Dec. 22, Ismael said.

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