Iraq to Invest $10 Billion in Gas Sector by 2030
Key Insight: Iraq poised for significant investment in its gas industry, indicating a broader energy strategy aimed at enhancing economic stability.
The Iraqi Oil Minister, Izzat Sabir, announced an ambitious plan for the government to invest $10 billion into the gas sector by 2030. This investment is part of Iraq’s strategic plan to enhance its energy exports, particularly from the Kurdistan Region and Kirkuk, areas where oil quality surpasses Brent benchmarks, suggesting increased profitability for the nation.
During the panel titled “Regulation of Oil and Gas Demands and Energy Futures in Iraq,” Sabir emphasized the importance of the oil and gas sector within the framework of Prime Minister Mohammed Shia Sudani’s cabinet. He highlighted that a staggering 47% of Iraq’s gas has historically been flared and underinvested, but projections indicate that by 2025, 14% of this previously wasted gas will be invested successfully over a span of three years.
Each percentage point of invested associated gas yields Iraq approximately $3 billion in revenue, while the flaring of gas results in a $1 billion loss. Thus, the government’s decision to invest in the gas sector is projected to generate substantial revenue—an estimated $30 billion against the initial $10 billion investment by 2030.
Ending Gas Flaring by 2030
According to Sabir, international partnerships, notably with the French company Total and Qatar Energy, are facilitating a substantial investment of $25 billion across the gas, oil, and electricity sectors in Iraq. Currently, over 66% of Iraq’s gas is undergoing investment, positioning the country to optimize its vast gas reserves.
Significant Gas Reserves
Iraq ranks among the world’s top three countries for gas reserves, with estimates of approximately 127 trillion cubic feet, which could sustain the country’s needs for the next 111 years. Despite this, Iraq continues to import gas from Iran and is actively seeking alternative sources due to ongoing sanctions against Tehran. A noteworthy development includes a signed agreement with Turkmenistan for gas imports; however, its implementation remains pending.
Increased Supply to the Kurdistan Region
In a related initiative, Prime Minister Mohammed Shia Sudani has committed to enhancing the supply of liquefied gas for household needs in the Kurdistan Region. Sabir articulated the complementary nature of the relationship between Baghdad and the Kurdistan Region within the gas sector, asserting that mutual benefits are essential for Iraq’s overall economic prosperity.
Electricity Demand and Production Challenges
Electricity pricing in Iraq closely approximates free, leading to inefficient usage among residents. Sabir reported that electricity demand has reached 50,000 megawatts, while the current production capacity lags at just 25,000 megawatts. He stated that the solution to the electricity challenge lies not merely in increasing output but also in reducing demand, pointing out the limitations of existing power plants, such as the underperforming Mansouriyah facility in Baghdad.
Shifting Energy Production Methods
Sabir reiterated that Iraq’s energy strategy should not depend solely on gas. Although gas offers lower costs and environmental benefits, its production is complex. To meet the 50,000-megawatt electricity demand, approximately 10 billion cubic feet of gas is required, yet current production falls short, reaching only about three billion cubic feet. Presently, 40% of power plants rely on gas, highlighting the critical role it plays in the energy mix.
Additionally, Iraq imports 800 million cubic feet of gas daily from Iran to support its electricity generation, underlining the importance of both domestic production and international partnerships in achieving energy security.
