According to the Oil and Gas Journal, Iraq’s proven natural gas reserves are 112 trillion cubic feet (Tcf). Probable reserves have been estimated at closer to 275-300 Tcf and work is currently underway by several IOCs and independents to accurately update hydrocarbon reserve numbers. Iraq’s proven gas reserves are the tenth largest in the world, and two-thirds of resources are associated with oil fields including, Kirkuk, as well as the southern Nahr (Bin) Umar, Majnoon, Halfaya, Nassiriya, the Rumaila fields, West Qurna, and Az-Zubair. Just under 20 percent of known gas reserves are non-associated; around 10 percent is salt “dome” gas. The majority of non-associated reserves are concentrated in several fields in the North including: Ajil, Bai Hassan, Jambur, Chemchemal, Kor mor, Khashm Al-Ahmar, and Al- Mansuriyah.

According to the EIA’s International Energy Annual report, natural gas production in Iraq has steadily declined over the past decade-and-a-half, reportedly due to an associated fall in oil production and deterioration of gas processing facilities. In 2005, dry natural gas production was approximately 87 billion cubic feet (Bcf); down from 215 Bcf in 1989. In late 2006, the MoO reported that natural gas production in was averaging 900 million cubic feet (MMcf/d) in the south (associated) and 490 MMcf/d in the north (non-associated) –including 375 MMcf/d of non- at the northern fields of Ajil and Jambur.

The MoO also reports that approximately 60 percent of associated natural gas production is flared due to a lack of sufficient infrastructure to utilize it for consumption and export. Significant volumes of gas are also reinjected to enhance oil recovery efforts. According to the January 2007 SIGIR report, approximately $4-billion worth of natural gas is flared or reinjected into wells.

The non-associated gas fields reportedly slated for priority development are mostly in the northern governorates near Kirkuk, including: Al-Mansuriyah and the nearby Khashem-al Ahmer and Jaria Pika, Kor Mor, Akkas, Chemchemal and Siba. According to the MoO, these fields have approximately 10 Tcf of reserves combined and could produce between 900 and 1000 MMcf/d for possible export and around 400 MMcf/d for domestic use. It is also been reported that the GoI plans to capture more associated gas at Rumaila and Az-Zubair within five to ten years. In 2004, Shell began work on a domestic master gas plan for Iraq on a cost-free basis. Results have not been publicly released at this time.

Along with petroleum contracts, several Saddam Hussein-era production sharing agreements and development contracts are reportedly up for review and renegotiation. The KRG is the first to move ahead with development of gas fields within their semi-autonomous territories. As in the petroleum sector, the KRG has exercised significant autonomy over the development of natural gas resources, including a reported deal in April 2007, with Royal Dutch Shell and Turkey's parastal Turkish Petroleum Corporation (TPAO) to develop Al-Mansuriyah. The GoI is also believed to have entered into talks with the Korea National Oil Company (KNOC) to discuss upstream gas development in April 2007. According to media reports, the following natural gas projects are moving ahead in Iraq:

Iraq’s Natural Gas Development Projects

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In May 2007, the MoO claimed a large natural gas discovery near Nineveh, to the West of Al-Qa’em with further extensions to the Iraqi-Saudi border. A ministry official reported that “the field would produce 100,000-bbl/d” of gas and condensate and that the European Union has expressed interest in developing the field, known as Ukash.

In 2001, the GoI reported a find of 2.1 Tcf of non-associated gas near Akkas field, in the central province/Western Desert, but it is not yet under development. According to recent press reports, there is interest by Shell Oil in developing this field as a source of income for the Sunni-majority governorates. IOCs have also proposed development for export to Syria. In May 2007, it was reported that the Syrian-based Euro-Arab Mashreq Gas Project is considering a link from the Akkas field to the Arab Gas Pipeline (AGP) currently under construction in Syria. The AGP is will feed the European gas supply network by way of Turkey. In September 2004, Iraq agreed to join the $1.2-billion, 351-Bcf/year Arab Gas Pipeline project linking Egypt, Jordan, Syria and Lebanon, but progress has been delayed.

The gas processing facilities, particularly in the South, have reportedly deteriorated since 2003. Prior to the war, the southern infrastructure included nine gathering stations with a processing capacity of 1.5 day Bcf/d, all of which was intended for export. The associated dry gas gathered from the North and South Rumaila and Az-Zubair fields was piped to a 575-MMcf/d natural gas liquids (NGL) fractionation plant in Az-Zubair and a 100-MMcf/d processing plant in Basra. At Khor al-Jubair there is a 17.5-million-cubic-foot LPG storage tank farm and loading terminals. Iraq also has a major domestic natural gas pipeline in the south with capacity of to deliver 240 MMcf/d of associated gas to Baghdad from the West Qurna field.

Gas processing facilities in the north currently gather supply from Kirkuk, Bai Hassan and Jambur for domestic consumption, including LPG. The system is designed to supply LPG to Baghdad and other cities, as well as dry gas and sulfur to power stations and industrial plants.

Prior to the 1990-1991 Gulf War, Iraq exported raw natural gas to Kuwait. The gas came from Rumaila through a 105-mile, 400-MMcf/d pipeline to Kuwait's central processing center at Ahmadi. Talks have been in progress since 2005 that would export 35 MMcf/d, rising to 200 MMcf/d, but a final deal is subject to passage of Iraq’s Petroleum Law. In 2007, the MoO announced an agreement to fund a feasibility study on the revival of the mothballed pipeline. The Kuwait Foreign Petroleum Exploration Company (KUFOEC) is reported to be interested in developing Iraqi gas in the south, but no deals have been signed The GoI continues to discuss northern export routes through Turkey, including linking up to the Azeri-Turkish Baku-Tbilisi-Erzerum (BTE) line, the planned Nabucco (Iran-Europe) pipeline, or the ongoing Arab Gas Pipeline project. The idea of gas exports remains controversial due to the amount of idle and sub-optimally-fired electricity generation capacity in Iraq - much a result of a lack of adequate gas feedstock.