If not resolved, spat between ministries will lead to continued energy supply problems
In terms of natural gas reserves, Iraq is in a strong position. It is, therefore, surprising that fuel has become a significant stumbling block for the country’s power sector. The reasons behind this are simple and well documented; ongoing communication and cooperation problems between the electricity and oil ministries.
When Oil Minister Hussein al-Shahristani became acting electricity ministry in June 2010 as a result of the departure of electricity minister Karim Waheed, there was a certain degree of optimism. Al-Shahristani had proven himself capable at the Oil Ministry and was expected to facilitate cooperation while presiding over both ministries.
However, Al-Shahristani has delayed decisions on the country’s power generation plans. As an acting minister, he has said it should be the new Electricity Ministry that takes these decisions, once such a figure has been selected.
This has not helped Iraq’s independent power project programme, which was recently scrapped in favour of government-funded options. One of the biggest complaints potential bidders expressed was the absence of guaranteed gas supply. Should the country’s plans to exploit its oil and natural gas reserves fall behind, they argued that there would not necessarily be gas available for power generation.
Also, Iraq currently flares about 700 million cubic feet a day, which would be enough gas to fire a 3,500MW combined-cycle gas turbine plant. The government has said that international oil companies have an obligation to use the gas. However, even if they produce power onsite and try to sell it, the ministry will not guarantee connection and purchase.
While the electricity and oil ministries fail to work together, the gas supply and hence, the electricity problems will continue.
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