EBRIL, Kurdistan Region - Iraq requires ten billion dollars to eliminate gas flaring by 2030, deputy oil minister said on Thursday, expressing confidence that the goal could be achieved even sooner, while highlighting foreign investment as a key contributor.
"We need $10 billion, and we will reach it [ending gas flaring] in 2030,” Izzat Sabir told Rudaw’s Mohammed Sheikh Fatih, adding that the goal could be met even sooner.
In the 2015 Paris Agreement, Iraq made a commitment to eliminate spontaneous gas flaring by the end of the decade.
“We are really hopeful that we will reach that stage before 2030,” he added.
Iraq is notorious for the deadly and toxic practice of gas flaring. It is second only to Russia in terms of the amount of gas burned off, though the Iraqi population lives on average much closer to the flaring sites than Russians do.
Sabir said Iraq produces 3,000 million cubic meters of gas, of which 2,000 million cubic meters are utilized, while the rest is flared.
He noted that in 2021, 53 percent of gas was utilized, now risen to 67 percent.
“One percent is equal to $1 billion,” he elaborated, attributing a 14 percent decrease in gas flaring to the efforts of Prime Minister Mohammed Shia’ al-Sudani’s government over the last three years.
He added that achieving this reduction required an $8 billion investment.
Due to OPEC limitations on oil exports, Iraq plans to prioritize fields with significant gas reserves
over oil, as gas exports are not subject to the same restrictions, Sabir said.
Iraq, OPEC’s second-largest oil producer after Saudi Arabia, has been cutting crude exports to comply with its OPEC+ quota. In December, the country sold 3.259 million barrels per day, reaching its lowest annual average sales since 2015, according to Iraq Oil Report.
Iraq imports gas worth $2-3 billion annually from Iran, Sabir said, highlighting efforts to diversify supply sources.
“In the next two to three years, we will build a fixed terminal in [al-]Faw Port to import and export gas from Qatar, Algeria, Russia, and any country in the world that has gas to sell,” he said.
On Wednesday Mohammed Abdalraba, head of the Iraqi parliament’s electricity and energy committee, said that Iraq’s exclusive reliance on Iranian gas imports and local production is a “big mistake.”
For years, Iraq’s electrical grid has depended on gas imports from Iran to run its power plants. The country lost nearly 5,000 megawatts of power in July 2023 due to Iran completely halting the supply of gas to the southern regions of Iraq, as well as decreasing exports to Baghdad and other central provinces.
Sabir stated that around 90 percent of locally produced gas is used for electricity generation, accounting for 40 percent of the country’s total power production.
“The potency of gas is one and a half times that of crude oil,” he said, explaining that gas is not only more efficient but also less harmful to the environment and leaves power stations with longer lifespans.
Sabir said that reducing gas flaring “fulfills the country’s [domestic] needs and gives you a clean environment.” He also noted that from 2024 to 2030, the Iraqi government will allocate $10 billion for gas investments, with expectations of generating $30 billion in revenue.
International energy companies are playing a key role in Iraq’s gas investment strategy, Sabir said, pointing to the involvement of TotalEnergies.
TotalEnergies signed a $27 billion contract in 2023 to develop Iraq’s oil sector - the biggest foreign investment in the conflict-ridden country’s history - and the project is set to steer Iraq towards a more sustainable path, Dunia Chalabi, managing director of TotalEnergies Iraq, told Rudaw on Tuesday.
Sabir said the combined projects the French energy giant is undertaking are expected to generate over $25 billion in investments. “They are not easy projects; they are all large strategic projects.”
He added that BP will invest in gas production in Kirkuk’s fields and “must end all gas flaring in the area.” The official also noted that “one of the conditions” for signing the BP contract is ensuring jobs for local workers.
Earlier in the month, Iraq signed a memorandum of understanding (MoU) with British energy giant BP to redevelop four oilfields in Kirkuk province.
On Tuesday, Zaid Elyaseri, BP’s Iraq branch chief said that the agreement will bolster the local economy and create job opportunities.
