Iraq strikes Basra gas deal with America’s Honeywell

Iraq’s ministry of oil signed an agreement on Wednesday with US energy giant Honeywell to increase gas production at five oilfields in Basra to 600 million cubic feet.

Thamir al-Ghadhban, Iraq’s oil minister, signed the agreement in Baghdad alongside the new US ambassador to Iraq, Mathew Tueller. Iraq’s state-owned company South Gas will work in partnership with Honeywell at Basra’s al-Artawi facilities.

“The Iraqi government and Ministry of Oil are very keen on investing in gas in order to increase the annual budget of the country and increase the production of Iraqi natural resources, and to also reduce air pollution by not burning the gas anymore,” Ghadhban told a press conference.

“Today the Iraqi oil ministry signed an agreement to increase Iraqi gas production in order to also benefit the electricity sector and for the internal and external use by exporting the gas for the regional countries and that will increase Iraqi’s annual budget,” he added.

Iraq’s Ministry of Oil announced its intention to capture gas flares for electricity generation back in February 2019. Doing so could help improve Iraq’s ramshackle power grid, which suffers daily blackouts, and clean up the environment.

Iraqi officials had said they aim to end gas flares in Iraq by 2021.

Also speaking at Wednesday’s press conference, US Ambassador Tueller hailed the deal.

“We are very happy and delighted to see steps are being taken by the Iraqi oil ministry regarding reinvesting in gas which was one of the main reasons behind air pollution in Iraq and, instead of wasting the gas, now the Iraqi oil ministry is investing in it to increase the annual budget of Iraq and also electricity production,” Tueller said.

“American gas companies including the Honeywell company are committed to serve the Iraqi state in order to increase the annual budget of Iraq, electricity production, and gas production, which the gas of the al-Artawi project is mainly focusing on, also those kind of projects will improve the environment and reduce air pollution in Iraq as well as provide job opportunity to hundreds or thousands of Iraqis,” he added.

Hayan Abdul Zahra, general manager of South Gas, said although the project is based in Basra, the whole country stands to benefit.