India’s Ambitious Plan to Liquefy Gas: Flaring Solutions and Import from Iraq 2023
India’s Ambitious Plan to Liquefy Gas: Flaring Solutions and Import from Iraq 2023
To cut down on losses and lower the need for imported gas, the nation aims to stop burning associated gas in the oilfields.
According to a senior government source, the Indian government is discussing with Iraq the prospect of establishing a facility there to liquefy the extra petroleum gas that the Arabian nation burns as a waste product and import it into India.
“Iraq has significant gas flare-ups. It almost equals the amount of petrol we import annually. We can consider building a liquefaction facility there. The difficulty is more about getting visas and deploying large teams to investigate and develop a strategy on the ground than intent, the person added.
India, the world’s third-largest energy consumer, constantly explores innovative strategies to meet its growing energy demands. As part of its pursuit of energy security and diversification of energy sources, India is now looking towards liquefying gas from flaring operations in Iraq and importing it.
This ambitious plan addresses the issue of wasteful gas flaring and offers a valuable opportunity for India to enhance its energy portfolio.
Gas flaring, which involves burning natural gas during oil extraction and production, is a global problem that harms the environment and wastes a valuable energy source. Iraq, one of the leading oil producers globally, is confronted with addressing extensive gas flaring. The country flares a substantial amount of associated gas that could be utilized for various purposes, including electricity generation and liquefied natural gas (LNG) production.
The conversation occurred last month during the joint commission meeting (JCM) between Iraq and India. The two-way conference, which takes place after a 10-year hiatus, follows the National Security Advisors’ gathering in March last year.
Iraq has experienced a problem with gas flaring. The nation aims to stop burning associated gas in oilfields to decrease losses and gas imports. Additionally, there is growing agreement that the increase in cancer incidence is related to chemicals released into the air.
Iraq burns 70% of the natural gas waste generated by its oil operations. According to a World Bank estimate, Iraq burns up roughly 16 billion cubic metres of petrol each day. But it has plans to stop gas flaring within the next two years. Foreign businesses have been encouraged to look into and exploit the natural gas deposits.
The Indian government has developed a policy to diversify as much as possible after the attack on two Saudi Aramco oil facilities in 2019, prompting Saudi Arabia to shut down half of its oil output. The government also plans to boost the ratio of term contracts compared to spot purchases.
We are also considering oil from Guyana. We are oil hoarders and will explore everywhere we can obtain favourable terms. The term-to-spot ratio is now 70:30. However, a 30% spot is also high. So that we can genuinely assess our outlay, we are looking at lengthier term arrangements, he added.
According to the official, India has received “very good” discounts from Iraq in the long-term contracts for oil supplies. The Iraqi government intends to speak with the oil firms about India’s request to increase the credit period from 60 to 90 days.
India’s plan to liquefy gas from Iraq’s flares aligns with its objective to curb flaring emissions and secure a stable supply of energy resources. The Indian government aims to tap into Iraq’s flared gas reserves, convert it into LNG, and import it to meet the rising demand in the domestic market. This initiative has a two-fold objective of reducing greenhouse gas emissions and providing India with a dependable and eco-friendly energy source.
Potential Benefits for India
- Energy Security: With the increasing demand for natural gas in India, diversifying energy sources is crucial for long-term energy security. Importing LNG from Iraq offers an additional supply stream, reducing reliance on traditional sources and providing a cushion against price fluctuations.
- Environmental Impact: India contributes to global efforts to mitigate climate change by converting flared gas into LNG. Reducing gas flaring helps decrease CO2 emissions, preventing air pollution and associated health hazards.
- Economic Opportunities: Collaborating with Iraq to liquefy gas presents economic opportunities for both nations. India can leverage its LNG infrastructure and technology expertise, promoting technology transfer and job creation. Iraq, in turn, can benefit from monetizing its untapped flared gas reserves and diversifying its energy exports.
Challenges and Considerations
- Infrastructure Development: Establishing the necessary infrastructure for LNG liquefaction, transportation, and regasification requires significant investments and coordination between India and Iraq. Building terminals, pipelines, and storage facilities are vital to the project.
- Geopolitical and Security Factors: Given the geopolitical landscape in the region, ensuring a stable and secure supply of LNG is paramount. Addressing potential political tensions, regional conflicts, and security risks will be essential for the plan’s successful implementation.
- Market Dynamics: While importing LNG from Iraq provides an additional supply source, India needs to consider the competitiveness and pricing of the imported gas compared to other existing and potential suppliers. Negotiating favourable terms and contracts will ensure cost-effectiveness and market viability.
India’s ambitious plan to liquefy gas from Iraq’s flares and import it reflects its commitment to sustainable energy practices, security, and international collaboration. By converting wasted flared gas into a valuable resource, India can simultaneously reduce environmental impact, strengthen its energy portfolio, and foster economic partnerships with Iraq. While challenges exist, strategic planning, infrastructure development, and effective collaboration can pave the way for a successful venture that benefits both nations and contributes to a cleaner, more sustainable energy future.
