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A Pipeline In The Pipeline:
Can Exporting Natural Gas Save Iraqi Kurdistan?

Honar Hama Rasheed
Beginning 2016 Iraqi Kurdistan will start to build a new natural gas pipeline to Turkey. But analysts say if they use the same policies they do for oil, the pipeline will make things worse, not better.
15.01.2016  |  Sulaymaniyah
خارطة تبين البنية التحية لاقليم كردستان  (photo: الموقع الرسمي لحكومة الاقليم )
خارطة تبين البنية التحية لاقليم كردستان (photo: الموقع الرسمي لحكومة الاقليم )

Thanks to recent geo-political conflicts, the oil pipeline between the semi-autonomous region of Iraqi Kurdistan and the region's neighbour, Turkey, is becoming more important than ever. And this in turn has apparently made both Turkey and Iraqi Kurdistan decide to build a gas pipeline too.

Officials from the two capitals, Ankara and Erbil, have been discussing building such a pipeline to bring gas from Iraqi Kurdistan to Turkey, and then from there, onto Europe, for some time.

Turkey is increasingly concerned that the Russians will stop supplying them with gas, given the latest conflicts between them after Turkey shot down a Russian fighter jet in a disputed area. And Iraqi Kurdistan continues to labour under Iraq's financial crisis; the region desperately needs new sources of income.

The Iraqi Kurdish Ministry of Natural Resources note that their region contains around 3 percent of the world's reserves of natural gas. If the Kirkuk region, currently under the control of Iraqi Kurdish military thanks to the security crisis, is eventually annexed to the Iraqi Kurdish region too, then that number jumps to 6 percent. Given this huge amount of natural gas and the current political and economic crises, a gas pipeline looks like an increasingly useful and lucrative project for both parties.

Iraqi Kurdish gas is of good quality and it wouldn't cost a lot to extract it and export it because of the location, Ghalib Mohammed, the Chairman of the Committee on Industry and Energy in the province of Sulaymaniyah, told NIQASH.

If Russia does put pressure on Turkey around natural gas then Iraqi Kurdish gas is a good option, says Mohammed.

“Natural gas is present in many parts of Iraqi Kurdistan,” Mohammed says. “It starts from the Karmayan area and stretches into Makhmour and Erbil. But most of it – around 80 percent - is in the Sulaymaniyah area and the Karmayan area.”

Turkey needs over 10 billion cubic meters of natural gas every year and most of it is imported from other countries.

During the Atlantic Economic Forum in October 2015, Iraqi Kurdistan's Minister for Natural Resources, Ashti Hawrami, said that by the early 2020s, the Iraqi Kurdish region would be able to export 20 billion cubic meters of natural gas to Turkey.

Information from the Energy and Natural Resources committee in the Iraqi Kurdish Parliament indicates that the gas pipeline will begin to be built in February 2016, with the aim of connecting Iraqi Kurdish gas with the Şırnak pipeline in the Kurdish-majority areas in northern Turkey.

On its website, Turkey's state owned crude oil and gas company, BOTAS, announced that it should have completed work on the pipeline within 270 days, after which Iraqi Kurdistan's gas pipeline would be connected to the Turkish network.

The pipeline project is due to be completed by the end of 2017 or beginning of 2018, says Sherko Jawdat, the chairman of the Natural Resources Committee in the Iraqi Kurdish Parliament, although they don't know the exact volumes that will be exported. “If the region works on this project with dedication, and if there is transparency about the revenues, this project would play a huge role in solving our financial crisis,” he notes.

It is also expected that the new pipeline will carry gas out of Kirkuk to Turkey.

“The local authorities in Kirkuk have agreed that they will participate in this regional project,” confirms Najat Hussein, a member of the Kirkuk provincial council's Energy and Natural Resources Committee. “Work on the project will start soon but it is not yet clear how long the construction of a pipeline from Kirkuk will take, or when it will be completed.”

Kirkuk's gas will be extracted from the Bai Hassan fields in the Salahaddin province, which are also under the control of the Iraqi Kurdish military, Hussein says.

However there are some issues. As the start date for the pipeline project approaches, local analysts are warning that if the regional government uses the same policy it has for oil exports, then the gas pipeline won't help anyone. In fact it could make things worse.

“It is true that exporting gas is very important for Iraqi Kurdistan,” Mohammed Raouf, a professor of economics at the University of Sulaymaniyah, told NIQASH. “But what is even more important is the policy that will guide the project and how this policy works to serve the interests of the region's people.”

“If there is no transparent policy on revenues for the gas pipeline then this project will only worsen the region's economic crisis,” he argues.

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