Author:  Isam Al Khalisi *

The photograph above, taken in December 2004, shows part of the site management offices of the $381m Mansuria Gas & Power Station Project  financed by the US’ Iraq Relief & Reconstruction Fund (IRRF), which was created after the 2003 war.

The project was intended to be the first stage of the utilization of the Mansuria gas field (located approximately 105 kms north east of Baghdad), and a continuation of investigations previously carried out, and a reworking of wells drilled prior to 2003. This included collecting the gas, treating it, and transporting it to a power station which was to be built within the field area, ready to be connected to the National Electricity Grid.

Due to a reallocation of funds, the US decided to stop financing the Mansuria project in 2005, with the “concurrence” of the Iraqi government. The hardware & documentation were handed over to the Iraqis late in 2005 & 2006.

Upon cancellation, the value of the engineering work & hardware handed over to the Iraqis was $62m. If you add to that the $39m allocated by the US’ IRRF for upstream work in the gas field, the cost to Iraq to finish the job would have been around $280m. This should then have given a functional 340MW power station ready for connection to the National Grid by early 2007. It would also have smoothed the way procedurally, technically & economically, at the later stages, for further development of the gas field to produce larger yields & more electricity generation. However, once the Iraqis took over the project, it was folded up altogether as if it had never been initiated.

In July 2011 Iraq’s Ministry of Electricity signed a contract with an Iranian company to construct a $365m gas pipeline to import for initial 5 years Iranian gas to the Mansuria area, and on to the Baghdad area power stations. The cost of the imported gas was to be at “international rate”. At the same time negotiations were started for a second gas line from Iran which was eventually approved for the go ahead at the end 2013.

Later, in November 2011, Iraq signed a contract with a Turkish-Korean-Kuwait consortium to develop the Mansuria gas field -principally for export.

In December 2011 the Iraq Ministry of Electricity signed a contract to build a new power station at Mansuria to run on the Iranian gas. By late 2013, the new station was reported as being in a state of completion, but still awaiting the arrival of the Iranian gas. This is now scheduled for the second half of 2014.

Deliveries to the Ministry of Electricity of the major hardware and communication equipment for the Mansuria power station have been recorded. However, it has not been possible, over the last 7 years, for an outsider to trace the fate of the original Project Management Site shown in the photograph (cost $5.5m), or of the other facilities such as gas line piping (cost $2.8m), as well as over $7m worth of investigation reports, engineering & data in 65 boxes.

The manner which the Mansuria project was handled by Iraq’s management of its domestic energy sector now proved to have been a pointer to the mode of actions that took place in the 5 to 10 years that followed.

Available records point strongly to the fact that Iraq’s government of 2006 had effectively halted all work on improving or developing the country’s resources of natural gas. The Mansuria Gas Power Station Project is one example of this.  No serious action was taken to develop Iraq’s natural gas potential around the country from 2006 until 2011. Only then, in 2011, were new contracts initiated for that purpose. In the meantime, with the escalating demand for electricity billions of dollars have already been spent on imported fuels.

Furthermore, the present government has committed the country to the export of substantial amounts of its future natural gas supplies. It is certain, therefore, that supplies for Iraq’  domestic consumption can only be maintained by extending indefinitely the importation of natural gas from outside and/or continuing with the use of more expensive, less convenient and pollutant liquid fuels; a substantial amount of these are now being imported already.

Careful calculations show that for the foreseeable future Iraq’s own natural gas is, at best, on the borderline of being adequate for the country’s own needs. 

 

* Isam AlKhalisi, Independent Consultant

Sources:

  • Special Inspector General for Iraq Reconstruction- Management of the Mansuria Electrical Reconstruction Project

(http://www.sigir.mil/files/audits/05-024-Mansuria_Elec_Project_Final_Report.pdf).

(Arabic http://www.sigir.mil/files/arabic/audits/05-024.pdf#view=fit).

  • Wisam Al-Shalchi – Development of Mansuria Gas Field

(http://www.scribd.com/doc/8257649/Development-of-Mansuriya-Gas-Field-Iraq)