MPs urge accelerated exploitation of natural gas

BAGHDAD / IraqiNews.com: Two members of the Iraqi parliament’s economic and oil & gas committees called on the government to speed up agreements with neighboring countries to exploit natural gas obtained during the extraction of oil before its burning in the air would cause an environmental “disaster”. “Iraq is in possession of about 3.5 billion cubic meters of natural gas reserves and it can produce more than 700 million cubic meters of associated gas that should cover the local market’s needs and exports,” Abdulhadi al-Hassani, the vice-chairman of the parliament’s oil & gas committee, told IraqiNews.com news agency. Iraq is currently losing $80 million per day as a result of wasted gas that is burnt in the air. The amount of gas burnt can fill approximately 300,000 gas cylinders daily. “There are agreements and debates about the exploitation of gas on the Akkaz gas field in the province of al-Anbar and the means to export it to Europe via the joint Arab pipeline that carries gas from several Arab countries to Turkey and on to Europe,” said Hassani. He pointed out that Saudi Arabia, one of the countries that export gas to Europe via this pipeline, has not given its consent in this respect. “Russia’s Gazprom, one of the leading experienced corporations in this field which provides Europe with nearly 25% of its gas needs, wishes to conclude gas-investing deals with Iraq. Soon we’ll see Akkaz entering the gas investment licensing round,” he added. Iraqi Minister of Oil Hussein al-Shahrestani had earlier announced that Iraq and Syria have embarked on investing the Akkaz field and agreed on exporting 50 cubic feet daily to the Syrian market. Shahrestani noted that the ministry has hatched a plan to develop the field and increase its production capacity to 500 million cubic feet, tenfold the current capacity, adding this extra production will be reserved for the European market that needs to purchase Iraqi gas. On Shell’s gas contract, Hassani explained that Shell has approved the proposed amendments to the contract on exploiting gas in the south. “Shell’s rate became 36% instead of 49% and moreover it agreed that Iraq should meet its local consumption needs before the exporting process,” he said, adding it also agreed to a proposal on having another company with it on the exploitation of gas in order to prevent monopolistic practices. “Shell has brought Mitsubishi along and agreed to have Iraqi manpower to work on this contract after providing the necessary training and rehabilitation,” he said. “By virtue of this contract, Shell shall purchase and sell gas at the global rates and also agreed on the term that taxes would be increased from 15% to 35%,” Hassani added. Royal Dutch Shell has won a contract to develop a joint venture with Iraq to extract gas in the southern part of the country with investments up to $4 billion. Hassasni said that the oil & gas committee insists on accelerating the legislation in this respect to provide a legal framework replacing the current decisions 21 and 22 of the year 1997. Meanwhile, Mohammed Khaleel, a member of the parliament’s economic committee, said that Iraq would soon join the line of gas exporters to Europe. “The European Union has requested to have Iraq one of its gas providers. There is the project of Baku-Ardrom line that runs through several Arab countries in addition to Iran and Turkey. This line is about 130 km away from the Akkaz field in the province of al-Anbar,” said Khaleel. He elaborated that when Iraq become one of the gas exporters to Europe, the state’s coffers will be receiving another resource that is no less important than crude oil exports. AmR (R) 1