Iraq plans three gas processing plants to reduce flaring

4/17/2017

BAGHDAD (Reuters) -- Iraq plans to build three new plants to process natural gas currently being flared at southern oil fields, and use the fuel for power generation and to increase the nation's income from energy exports, Oil Minister Jabar al-Luaibi said on Monday.

Iraq is forced to flare some of the gas produced alongside crude oil as it lacks the facilities needed to capture and process it into usable fuel.

The country has just one gas processing company, the Basrah Gas Company, a JV between Iraq state-run South Gas Co., Shell and Mitsubishi.

"The ministry is seeking to end the flaring of associated gas in the next few years, despite the economic and financial challenges," Luaibi said in an emailed statement.

Iraq's natural gas output will triple to 1,700 MMcfd by 2018, as the nation implements projects to reduce flaring, Luaibi told an energy conference in Baghdad on April 2.

OPEC's second-largest crude producer after Saudi Arabia, Iraq is seeking to increase its oil and gas income which account for nearly all its public budget.

The country has struggled to pay its bills since crude prices dropped in 2014, the same year Islamic State militants seized a third of its territory.

Reporting by Ahmed Rasheed, editing by David Evans