Having successfully begun commercial crude oil production in Iraq, Russian energy firm Lukoil is studying the feasibility of producing petrochemicals at the West Qurna-2 oil field in the south of the country.

Lukoil has reached a preliminary agreement with the Oil Ministry for a petrochemicals project, which will utilise associated gas from the field to produce methane and methanol.

The Russian firm will present a feasibility study to the Iraqi government by the end of May, according to local media reports citing deputy prime minister for energy affairs, Hussein al-Shahristani, who made the announcement at the opening ceremony of the field on 30 March.  

Lukoil plans to ramp up production to 400,000 barrels a day (b/d) before the end of 2014 before increasing it to 550,000 b/d in 2017 and up to 1.2 million b/d by 2019. This production plateau will then be maintained for 19.5 years.

According to the Paris-based International Energy Agency (IEA), unprocessed associated gas in the south of Iraq consists of about 70 per cent methane, along with 30 per cent natural gas liquids, which include 15 per cent ethane and 8 per cent propane.

Iraq published its Integrated National Energy Strategy (Ines) study in June 2013, setting out the country’s priorities for the oil, gas and petrochemicals sectors.

Methane would first be allocated to the power sector, since it provides the highest benefit in the use of gas through increased efficiency in production, lower emissions and the displacement of liquid fuels, freeing them up for export or higher-value uses.

The methane would then be used for fertiliser, methanol and steel production. Under the Ines plan, by 2030, Iraq could produce as much as 3 million tonnes a year (t/y) of methanol. This could then be used as a feedstock for the polymer polyphenyl ether (PPE), commonly used in the production of lubricants and methyl tertiary butyl ether (MTBE), a fuel component.