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ENERGY >KRG plans 10 bcm in natural gas exports to Turkey in two years

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Iraq’s Kurdistan Regional Government (KRG) plans to export 10 billion cubic meters (bcm) of natural gas to Turkey over the next two years, KRG Natural Resources Minister Ashti Hawrami has stated.

“Over the next two years, we plan to export around 10 bcm gas to Turkey, but this target may be extended to 2019,” Hawrami said on Nov. 20, as quoted by Reuters. 

Speaking at the Atlantic Council Energy & Economic Summit in Istanbul, he also said he did not have any concerns about how this gas will be imported by Turkey, as the country has the required infrastructure, state-run Anadolu Agency reported. 

Meanwhile, Genel Energy, a major oil producer in the KRG, plans to establish a joint company with the KRG government to develop gas fields, its chairman Tony Hayward said at the same conference. 

Pointing out that General Energy has two natural gas fields in the KRG, Miran and Bina Bawi, which have gas reserves of around 300-400 bcm, Hayward said these fields would become fully operative by the end of 2016 and exports to Turkey were planned to start within the next two to three years. “We’ll start our gas projects before 2016 ends and we will have the opportunity to start the gas flow in two to three years. By increasing production to 10 bcm, we’ll realize the first phase of a deal with Turkey,” Hayward said, as quoted by Reuters. 

Estimated 5 trillion cubic meters of gas

The KRG has an estimated 5 trillion cubic meters of gas in its territory, the Genel Energy chair said, adding that the region could reach gas exports of up to 20 bcm to Turkey and to Europe through Turkey with the entrance of other companies to the KRG market before the end of the 2020s. 

Long-running disagreements between the KRG government in Arbil and the Iraqi government in Baghdad persist over the distribution of the region’s oil revenues. 

KRG officials say they have opted to directly sell their oil to customers, rather than through the Iraqi state’s oil company, SOMO, because Baghdad continues to delay agreed upon payments to Arbil. A separate oil agreement between Arbil and Ankara was inked in 2013. 

“We faced huge budget deficits in the first half of this year because we only received around $2 billion of the expected $7 billion of oil income. We therefore needed to sell our oil by ourselves,” Hawrami said, as quoted by Anadolu Agency. 

He also added that they had been unable to pay many of the KRG’s peshmerga forces that are currently fighting against the Islamic State of Iraq and the Levant (ISIL) due to financial problems. 

“We couldn’t make payments to around 1.4 million public servants for three to four months in the first half of this year. But by selling our oil by ourselves we earned twice as much as we could have earned from the oil deal with Baghdad. We have therefore at least been able to resume monthly civil servant salaries, although some months still remain unpaid. We are in a better condition now,” Hawrami said. 

He  also noted that the KRG planned to increase its crude oil export capacity to 1 million barrels per day (bpd) by the end of 2016, up from around 700,000 bpd today.

November/20/2015

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