Iraq to start developing Akkas gas field to pave way for foreign investments

Iraq will start developing the Akkas gas field in an initial stage to pave the way to attract foreign investments, the oil ministry said Nov. 13, as OPEC's second biggest producer seeks to boost its gas output.

State-run Iraqi National Oil Co. discussed during a meeting plans to nationally operate Akkas field in the Western Desert in al-Anbar province, the ministry said in a statement.

South Korea's state-run Korea Gas Corp., or Kogas, signed a deal in 2011 to develop Akkas, but the Islamic State militant group seized the field during its occupation of swaths of Iraq during the 2014-2017 war, before Iraqi forces recaptured the field.

Akkas, the country's largest non-associated gas field, can produce 400 MMcf/d, Hamed Younis, a deputy oil minister, told S&P Global Platts in June 2020.

Iraq has been seeking help from international oil companies to capture associated gas. The majority of Iraq's gas output is pumped with oil and the associated gas is mostly flared. Iraq was the world's second-worst flaring nation after Russia in 2020, according to the World Bank.

IOC help

Iraq's state-owned South Gas Co. and Baker Hughes plan to develop a 200 MMcf/d gas recovery project in the south following a three-year delay, Iraqi Oil Minister Ihsan Ismaael said Sept. 19.

The project will process associated gas from Nasiriyah and al-Gharraf fields in the southern province of Dhi Qar.

The country also signed $27 billion worth of projects with TotalEnergies, including a $2 billion gas-gathering project.

The Ar-Ratawi gas-gathering network and treatment units will have a capacity to capture 600 MMcf/d of flared gas. The project will also produce 12,000 b/d of condensate and 3,000 mt/d of LPG to be used in the domestic market.

The gas project will help lessen reliance on Iranian imports as well as reduce the burning of liquid fuels for power generation, which amounts to 200,000 b/d, Ismaael said at a press conference Sept. 5. Currently, Iraq pays Iran $8/MMBtu for gas, while the Ar-Ratawi project will deliver gas at a cost of $1.50-$2/MMBtu, the minister added at the time.

Iraq also expects to wean itself off Iranian gas exports by 2024-2025 as it speeds up projects to boost domestic gas production.

Baghdad is under increasing US pressure to lower dependence on Iranian gas and electricity imports, which are needed to avert acute power outages in the summer when temperatures can soar to 50 C in the south.

Since 2018, Baghdad has been receiving waivers from Washington to continue importing Iranian energy, which has been subject to US sanctions since that year.