Shell pursues alternatives in Iraq

q&a: Mounir Bouaziz

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After decades of underinvestment and poor planning in its oil industry, Iraq ranks fourth in terms of the quantity of flared gas. But flaring could grow substantially if oil companies expand production without building the infrastructure to capture the gas extracted with the oil. In 2008, Royal Dutch Shell signed a preliminary agreement with the Iraqi ministry of oil to capture and market natural gas from southern oilfields in partnership with Mitsubishi of Japan. The agreement is now before the Iraqi cabinet for final approval. The answers below are taken from remarks by Mounir Bouaziz, Shell's vice president for new gas business, to a conference in Oman earlier this month.

q How large is the flaring problem in Iraq? a Above 1 billion cubic feet per day (cfd) of gas is being flared in Iraq. The economic loss is about US$2 billion (Dh7.34bn), or $50 per second. We estimate that 14 million to 20 million tonnes of carbon dioxide are emitted every year from flaring. If no action is taken, in terms of dealing with the associated gas, in the next two to three years we could be contemplating the flaring of more than 3 billion cfd.

What could the captured gas be used for? @Body-Answer2 :Iraq has the potential to become one of the key players in the world in terms of gas production and gas export. The most effective way of enhancing Iraq's oil production is water injection [not re-injection of gas], so gas really needs a solution, export is a necessity. What has South Gas Company, Shell's joint venture with Mitsubishi and the Iraqi government, done so far?

@Body-Answer2 :Since 2008, South Gas Company has captured 135 million cfd of gas, about 20 per cent of the total amount flared. We have reduced [carbon dioxide] emissions by 4 million tonnes per year. Eighteen megawatts of electricity power capacity was re-established, and there's 52mw of new power in the pipeline. What is the effect on the country's carbon footprint? @Body-Answer2 :The impact on the environment is tremendous, we could be contemplating here 80 million tonnes per annum of [carbon dioxide]. There is urgency: [worldwide] everyday we lose a few more million tonnes in the atmosphere. They have a responsibility to the world as well.