ROMANIA

Let there be light: in contrast to southern Iraq, electricity supplies in Erbil and the surrounding area are almost continuous.

At night, a reddish glare surrounds Basra in hydrocarbon-rich southern Iraq. Yet the city has electricity for just four hours a day; none at the night. The glare is the effect of “flaring”, or burning off, vast quantities of natural gas from the huge Rumaila, Zubair and West Qurna oil and natural gasfields.

Erbil, the capital of the semi-autonomous region of northern Iraq, is alight too, though not from the glare of natural gas burning, but because it has electricity 22 hours a day. This is no small matter but is a sign of the different fortunes of the natural gas industries in northern and southern Iraq, with significant implications for the Kurdistan region.

The US Geological Survey estimates Iraqi Kurdistan has 60,000bn cubic feet, more than the estimate for gas reserves in Libya.

While crude oil attracts most attention from industry executives, diplomats are particularly interested in natural gas, because Turkey is short of supplies and Ankara has signalled it is ready to import and serve as a corridor for exports.

Selahattin Cimen, deputy undersecretary at Turkey’s Ministry of Energy and Natural Resources, says Kurdistan could supply the country with gas for power generation. “Turkey is the natural direction for exports of hydrocarbons from the region [of Iraqi Kurdistan] to the world’s market,” he says.

Turkey is particularly keen to import natural gas for power generation, and perhaps build a gas pipeline from the fields near Sulaimaniya, the second-largest city in Kurdistan, to the Turkish Mediterranean port of Ceyhan. Kurdish and Turkish officials talk about building an export facility to supercool natural gas so it can be transported by ship, although industry executives say such a facility is years, if not decades, away.

Aydin Selcen, Turkish general consul in Erbil, says his country depends on Russian natural gas for 70 per cent of its imports. “The most commercial alternative seems to be the Kurdistan Regional Government (KRG). We have a long shared border.”

Turkey is even talking about connecting an export pipeline from Kurdistan to the projected Nabucco pipeline, which would link the gas-rich Caucasus and Central Asia to energy-hungry European nations.

A second option suggested by officials in Baghdad, and with less support in Erbil, is the so-called Arab Gas Pipeline (AGP) project.

According to the US Department of Energy, the AGP would deliver gas to Syria and then to Lebanon and the Turkish border. But the recent violence in Syria means the project faces an uncertain future.

By Javier Blas, Financial Times

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