New Revenue Source: Iraq ships 10,000 standard cubic feet of gas in first ever export
The first ever natural gas export left Iraq’s southern coast yesterday, according to reports from the Associated Press. The historic shipment comes as the Iraq government looks for new sources of funding amid low oil prices and an ongoing battle with ISIS leave the country badly in need of revenue.
A Panama-flagged gas carrier sailed Sunday afternoon from the port of Umm Qasr on the Persian Gulf loaded with about 10 Mcf of gas in the form of condensates, Oil Ministry Spokesman Assem Jihad said. The spokesman did not release details regarding the cargo’s buyer, or how much had been paid for Iraq’s first natural gas export.
Iraq has sought to export natural gas since the late 1970s, but its plans were derailed by the Iran-Iraq war in which export facilities were bombed.
The gas is being produced as part of a joint venture between the Iraqi government, Royal Dutch Shell (ticker: RDSB, Shell.com), and Mitsubishi Corp. (ticker: MSBHY, MitsubishiCorp.com), which own 51%, 44% and 5% of the project, respectively. The $17 billion joint venture was singed in November 2011 to gather, process and market gas from the 17.8 billion-barrel Rumaila, the 4.1 billion barrel Zubair field, and the 8.6 billion barrel West Qurna Stage 1, all located in the Basra province.
Iraq has estimated natural gas reserves of 112 Tcm, according to the IEA, making them the 11th largest in the world.
Iraq’s 2016 budget is based on $45 per barrel oil prices with expected export capacity of 3.6 MMBOPD. As a result, the nearly $89.7 billion budget includes a deficit of about $20.5 billion, leaving Iraq in need of sources of revenue other than oil exports. As of this morning, Brent crude is trading at about $41.
The Oil Ministry’s spokesman said the next export of natural gas will ship by the end of this month.
