Iraq's gas flaring paradox: a wealth of resources, a nation in need

 Shafaq News/ Iraq, home to the world's 12th-largest natural gas reserves, continues to flare billions of cubic meters of gas annually while relying on costly imports from Iran. Despite recent efforts to boost domestic gas investments, structural hurdles hinder progress, leaving the country vulnerable to external pressures and economic inefficiencies.

A Costly Paradox

Iraq produces significant volumes of associated gas—natural gas found alongside oil—yet remains reliant on imports. Meanwhile, the country continues to burn large quantities of gas through flaring, a process where unutilized associated gas is burned instead of being captured for use.

The World Bank's 2023 Global Gas Flaring Tracker Report ranked Iraq among the top nine gas-flaring nations, alongside Russia, Iran, the US, Venezuela, Algeria, Libya, Nigeria, and Mexico. “These countries collectively accounted for 75% of global gas flaring but only 46% of global oil production.”

According to the report, Iraq flared approximately 18 billion cubic meters of gas in 2023, burning a resource that could otherwise fuel domestic electricity generation, reduce reliance on Iran, and contribute to economic diversification.

“This situation reflects severe mismanagement of resources and deep-rooted economic dependence on Iran,” said Ahmed Eid, an economic researcher. “Iraq’s inability to harness its own gas reserves despite ranking 12th globally in gas reserves is a glaring failure of strategic planning.”

Iraq imports roughly $3 billion worth of gas annually from Iran to power its electricity sector. “This exposes Iraq to political and economic vulnerabilities, as Iran has repeatedly used energy supplies as leverage,” Eid added.

Experts estimate that Iraq loses billions of dollars each year by failing to capture and utilize its gas resources. “In a time when the government is facing fiscal pressures due to fluctuating oil prices, this inefficiency is unacceptable,” said economist Mustafa Al-Faraj.

“The cost of importing gas, coupled with the environmental damage caused by flaring, creates an unsustainable economic model.”

Beyond financial losses, the practice contributes to severe environmental pollution, drawing international scrutiny. “Gas flaring significantly increases carbon emissions, worsening air quality, and public health,” Al-Faraj noted.

“Iraq is already under pressure to comply with global environmental standards, and its current policies could hinder foreign investment and economic partnerships.”

Moreover, Iraq heavily relies on Iranian gas, and US sanctions on Iran have complicated payment mechanisms, forcing Iraq to seek waivers to continue energy imports. “This creates ongoing uncertainty,” said Al-Saabri. Washington has pressured Iraq to find alternative suppliers, but Iran remains the most convenient and cost-effective source for now.

Instead of investing in its resources, Baghdad has explored diversification strategies, including importing gas from Turkmenistan via Iranian pipelines, though this plan faces US objections. Meanwhile, efforts to develop Iraq’s own gas fields, such as Akkas and Al-Mansouriya, have been sluggish due to security and logistical challenges.

Gas shortages have exacerbated Iraq’s chronic electricity crisis. The country generates around 27,000 megawatts of electricity, far below the estimated 45,000 megawatts needed to meet demand.

The government has turned to renewable energy and power agreements with neighboring countries, but experts warn that without a stable domestic gas supply, these efforts will fall short. “Iraq cannot sustain its economy without reliable energy,” said Sherwani. “Renewables are part of the solution, but natural gas must remain the backbone of the energy mix for the foreseeable future.”

Shifting Priorities: Government Initiatives

Historically, Iraq’s energy policy prioritized oil production over gas development. However, the sharp rise in global gas prices following the Russia-Ukraine war has forced Baghdad to rethink its approach. The Iraqi Oil Ministry has pledged to eliminate routine gas flaring by 2028.

Prime Minister Mohammed Shia Al-Sudani announced during the Iraq Energy 2025 Conference that Iraq has achieved a 70% reduction in associated gas flaring, a “major step” to curb carbon emissions and minimize energy waste.

As part of its strategy, the Iraqi government has engaged in licensing rounds for gas development and signed contracts with major international firms to capture and process gas from key fields.

In January 2025, Deputy Prime Minister and Oil Minister Hayan Abdul Ghani laid the foundation stone for the Artawi gas project in Basra, developed in cooperation with France’s TotalEnergies.

“The accelerated gas investment project at the Artawi field will add new gas supplies to the national grid, supporting power plants with the required fuel,” Abdul Ghani said during the ceremony.

The first phase, with a capacity of 300 million standard cubic feet per day, is expected to be completed in three years, while the second will be finalized within five years.

“The shift in policy is overdue but necessary,” said energy expert Dr. Kovend Sherwani. “However, work is expected to begin this year and continue until 2028 on establishing large, modern, and technologically advanced power plants, while gas investment projects are completed to supply these major plants with fuel.”

“Gas will play an essential role in Iraq’s energy security, especially as global oil demand fluctuates. If Iraq successfully invests in gas infrastructure, it could even become a regional exporter.”

“These projects, if executed effectively, could make Iraq self-sufficient in gas and reduce the need for Iranian imports within five years,” said Sherwani.

In this regard, Deputy Chairman of the Parliamentary Investment and Development Committee, Hussein Al-Saabri, stated that "the gas file has been significantly delayed, but there is now serious effort in this regard. Iraq uses part of its gas and exports the rest, but the process takes time.” According to the Oil Ministry’s estimates, it will take between three to five years to fully utilize all available gas."

Al-Saabri told Shafaq News Agency that once Iraq achieves full gas utilization, there will no longer be a need to import gas for power plants, as the country will reach self-sufficiency.

Challenges to Implementation

Despite the renewed focus, obstacles remain. Years of underinvestment in gas infrastructure mean that existing facilities are outdated and inefficient. “To achieve gas independence, Iraq needs to build state-of-the-art processing plants, develop new pipelines, and modernize its storage capabilities,” said Sherwani. “This requires billions of dollars in investment, which may be difficult given Iraq’s budgetary constraints and governance challenges.”

The issue of corruption further complicates the outlook. “Corruption has stalled numerous energy projects in Iraq,” said oil expert Dr. Hamza Al-Jawahiri. “Several contracts signed in the past failed due to bureaucratic inefficiencies and rent-seeking behavior by political elites. Unless the government tackles these structural problems, even the best-laid plans will struggle to materialize.”

Security concerns also pose a threat. Attacks on gas infrastructure, particularly in northern Iraq, have disrupted operations. The Khor Mor gas field, a critical supplier to the Kurdistan region, has been repeatedly targeted, underscoring the risks associated with developing the sector.

Road Ahead: Can Iraq Break Free?

To reduce dependence on Iranian gas and fully utilize its domestic resources, Iraq must accelerate its gas investment strategy. Experts suggest prioritizing infrastructure development, enforcing anti-corruption measures, and strengthening public-private partnerships.

“The solution lies in creating an investment-friendly environment,” said Al-Faraj. “Iraq needs to provide incentives for foreign and domestic firms to invest in gas processing and transportation. Without that, the country will continue wasting its most valuable resources.”

Sherwani echoed this sentiment, emphasizing the need for long-term strategic planning. “Iraq’s gas reserves present a tremendous opportunity,” he said. “If managed correctly, gas could not only ensure energy security but also become a major driver of economic growth.”

Is This Enough?

Experts suggest that while Iraq is working to develop its associated gas resources, it also needs to invest in non-associated gas, or free gas—a type of natural gas found in reservoirs independent of oil or water. Unlike associated gas, free gas can be extracted directly without the need for separation from other fluids.

The country possesses four prominent non-associated gas fields including the Khor Mor, in the Kurdistan Region, which is among the largest non-associated gas fields in the country. The Khor Mor facilities currently supply more than 500 MMscf/d of gas to four power stations, enabling the generation of approximately 2,800 MW of electricity, which constitutes more than 75% of the Kurdistan Region's power generation.

Akkas, in western Iraq, is the country's second-largest non-associated gas field, it can produce 400 MMcf/d.

There is also Al-Mansuriyah, located in central Iraq, and the Siba field in southern Iraq.

In 2024, the Ministry of Oil signed a contract with Ukraine’s Ukrzemresurs LLC to develop the Akkas gas field, targeting an initial production capacity of 100 million standard cubic feet per day (mscf) within two years, with plans to expand to 400 mscf in four years.

Similarly, the Ministry secured an agreement with China’s JERA and Iraq’s Petro Iraq to develop the Mansuriyah gas field in Diyala, which will add 300 mscf to Iraq’s energy grid.

For now, Iraq remains at a crossroads. While recent government initiatives mark progress, the path to energy self-sufficiency is fraught with challenges. Whether Baghdad can overcome them will determine its future as an energy-independent nation or keep it locked in a cycle of dependency and economic inefficiency.