Iraq's gas import move absurd

The first time I heard the word "absurd" was more than 50 years ago in connection with the then famous "theatre of the absurd" in what is described as a "world without meaning or man as a puppet controlled or menaced by an invisible outside force".

I did not know then that I would live to see the occupation of Iraq and the absurd energy situation that followed.

Recent reports all over the Iranian media are suggesting ongoing talks to supply Iraq with natural gas and Tehran Times and Press TV on Thursday reported Mostafa Kashkouli, the Deputy Managing Director of the National Iranian Gas Company, as saying "Iran is in negotiations with Iraq to pump its gas to the country via two pipelines that cross the border at Dehloran and Khorramshar" and that Iran "seeks to increase its share of the gas export market by finding new consumers".

Far away

And last year, Iranian Oil Minister Massoud Mir Kazemi suggested that Baghdad might benefit from Iranian gas in its efforts to increase electricity production.

How very nice indeed when there is a complete silence on the side of the Iraqi oil ministry, the legally empowered entity for such deals. But Azzaman newspaper reported as early as December 27 that the ministry of electricity is sending an Iraqi delegation to Tehran to sign a deal for the import of Iranian gas.

Azzaman went on to say this "signals how dependent Iraq has become on neighbouring Iran for essential supplies and goods since the 2003-US invasion of the country". Also on December 29, Parliamentarian Tayseer Al Mashhadani, demanded the Ministry of Electricity exploit gas fields in Iraq instead of extending a dry gas pipeline from Iran.

There are no oil and gas lines crossing the borders between Iraq and Iran and Dehloran is so far away from the Iraqi network while Khorramshar, or Mohammarah, as the Iraqis like to call it, is so near from where most the gas produced in Iraq is being shamelessly flared.

Of course, in normal circumstances, there is nothing wrong with Iran's attempts to export its gas and there is nothing wrong if Iraq truly needs to import that gas. But on average in 2009, Iraq produced about 1,500 million cubic feet a day (mcfd) of associated gas and only utilised about 800 mcfd and the rest was flared mostly in the south.

Processing plants

Iraq's gas processing plants are barely working at 30 per cent capacity and when properly repaired, there will be no gas flared in the region. Also when the pipeline network is maintained and the short remaining connection to Baghdad is finally done, all the gas will be consumed in the power plants that are now forced to rely more on expensive liquid fuels.

Although little was done since the occupation of Iraq to revitalise these facilities, I hope the Iraqis will not fall to the absurd situation of finding imports from Iran far more worthwhile than putting their house in order just like finding petroleum products imports easier than maintaining and expanding the refineries.

Processing the flared gas will also give the Iraqis the chance to produce more liquefied petroleum gas (LPG) and stop the imports going on since 2003. The average imports in 2009 were about 750 tonnes a day at an enormous cost.

At the same time and if and when Iraq utilises all its gas resources, Iraq may develop its own gas fields in the north and west of the country to enhance its production potential and stabilise its network to cater to its growing needs.

More than a year ago, Iraq signed a memorandum of understanding with Shell to repair, modernise and fully utilise the gas resources in the south. But that has not been turned into a full and binding agreement due to the not-so-clear terms of it and Iraq gas flaring continues unabated.

All the tasks facing the Iraq gas sector are far easier than relying on imports from a country that recently claimed that Iraq's deepwater terminal in Khor Amaya, which has been in existence for more than 50 years, is in its territorial waters. Iran also recently occupied an Iraqi well in Fakka close to the borders, which has been in existence since the early 1970s.

I hope to see the day when Iraq has used its gas potential to the limit and when it will not be absurd to talk about imports from neighbouring countries or exports to them.

The writer is former head of the Energy Studies Department in the Opec Secretariat in Vienna.