Invited Talk

Iraq Energy Forum

Hosted by IRAQ Energy Institute(IEI)

Al Rasheed Hotel Baghdad

April 2-3, 2017

The Gas challenge for Iraq’s Electricity

Generation
Plenary Session-8: Gas & Power Session
Dr. Jafar D. Jafar
Uruk Engineering & Contracting Company (LLC)
 Highlights of This Talk
1. Commercials

2. Iraq’s Power Sector

‒ Electricity Generation

‒ National Grid Transmission at 400kV and 132kV

‒ Electricity Tariff

3. Fuel Supply

‒ Light Distillate Oil (LDO)

‒ Crude Oil (CO)

‒ Heavy Fuel Oil (HFO)

‒ Natural Gas (NG)

4. Natural Gas As Fuel for Power Generation

 Uruk Engineering & Contracting specializes in Iraq’s energy sector. It Completed the
country’s first “Fast Track” project according to plan; and its Environment, Health &
Safety (EHS) includes over 6 million man-hours logged in the construction of 3 power
plants without a major incident. Uruk is a fully integrated Engineering, Procurement
and Construction (EPC) company providing turnkey solutions with single source
responsibility in the areas of power, infrastructure, oil & gas, petrochemicals, and
wastewater management.

OUR MISSION
“ We will rebuild Iraq’s power and energy sector through leadership,
innovation, and excellence; Completing projects on time, within
budget and to the best global standards possible.”

Page # 3
 POWER

1. EPC Contractor

2. Established in the U.A.E /Dubai since 2004

3. Certified ISO 9001:2015

OIL & GAS

4. Excellent Quality Credentials

5. Excellent EHS Credentials

6. Al Mansuriya Power Plant Project Completed

7. More than 4 million man hours without Loss of Time Incident (LTI)
INFRASTRUCTURE

8. Recently selected as best EHS site by Alstom worldwide

9. Constructed 1150 MW (ISO) so far in Iraq

10. Experienced in installation of GE Frame 6B, Frame 9E and Alstom 13E2 GTGs

Page # 4
 ACHIEVEMENTS ISO Certified 9001:2015
 2004: Private company established to address Iraq's energy and infrastructure rebuilding needs.

 2004: Baiji steam plant rehabilitation project completed for Bechtel.

 2004: UAE operations established as regional headquarters.

 2009: Quds project completed for USGRD/MoE (2x125 MW GE frame 9E)

 2012: Taji project completed for MoE (4x42 MW GE frame 6b)

 2013: Mansuriya JV with Alstom completed but no fuel (4x182 Alstom 13e2)

 In Bid Evaluation Stage :

 Diwaniya O&M Open Cycle (4 x 125 MW) plus IPP Add-on EPC and O&M
 Mansuriya O&M Open Cycle (4 x 182 MW) Complete Rehabilitation IPP plus Add-on O&M
 Duara (4 x 160 MW) Complete Rehabilitation IPP plus O&M
Page # 5
QUDS POWER PLANT PROJECT
Uruk – Baghdad Company JV

• 250 Megawatts
• USD170,000,000
TAJI POWER PLANT PROJECT

• 168 Megawatts
• USD85,000,000
• 4 x GE Frame 6B Free Issued by MOE
MANSURIYA POWER PLANT PROJECT
Uruk – Alstom JV

• 724 Megawatts
• USD539,463,000
 IRAQ’S POWER SECTOR

Networks for the Distribution of Electricity

Types of Consumers
• Government Entities
• Households
• Industrial
• Commercial
• Agricultural
Losses of Electrical Energy Within Distribution Networks was ~50-60%.
Ministry of Electricity Has Privatized Tariff Collection Plus Maintenance of
Distribution Networks. Underground Networks and SMART METERS Are
Being Adapted.
Average Tariff Over All Types of Consumers Should Be At Least
8¢ US/kWh or 100 IQD/kWh If Government Subsidies Are to Be Mostly
Eliminated.
MOE Produced 92.1 x 106MWh During 2016.
At This Price Then 2016 Total Revenue Would Have Reached ~7.4 BUSD.
Page # 9
 IRAQ’S POWER SECTOR

National Grid Transmission at 400 kV and 132 kV

To Remove Transmission Bottlenecks the following Projects Should be

Implemented During the Next 5 Years
 Three 400 kV Sub-Stations Every Year
 Twelve 132 kV Sub-Stations Every Year
 At Least 500 km of 400 kV Transmission Lines
 At Least 1000 km of 132 kV Transmission Lines

Page # 10
 IRAQ’S POWER SECTOR
Iraq’s Electricity Generating Capacity (2017)
(Excluding KRG)

Power Plant Design Capacity (MW)

Steam Hydro GTG(ISO)

Pre 2003 4840 1500 2000

Added by US Period (2003-2011) 0 0 2500
GE Mega Deal + Fast Track (2008) 0 0 7670
Siemens Deal (2009) 0 0 3400
Al-Zubaidiya (Shanghai) 2540 0 0
Al-Mansuriya (Alstom – GE/Uruk) - - 730
Besmaya Phase 1 (Investment) - - 1500

Sub Total 7380 1500 17800

TOTAL: 26680 MW

Page # 11
 IRAQ’S POWER SECTOR
Loss of Iraq’s Generating Capacity Due to
Intervention of Daesh (June 2014)

(MW)
Baiji Steam 6 x 200 1200

Baiji Old Gas Turbine 4 x 160 640

Baiji Gas Turbine 6 x 165 990
Gayara Gas Turbine 6 x 125 750
Mosul Gas Turbine 12 x 25 300
Almost All Hydro Power Plants 1800
Total (MW) 5680

Therefore, Only Approximately 21000 MW of Electricity

Generation Capacity Remains After June 2014

Page # 12
 IRAQ’S POWER SECTOR
Iraq’s Annual Electrical Energy Generation (Except KRG)
(2013-2016)

AVERAGE ANNUAL INCREASE 7.0%

140
Annual Electricity Production

120

100 92.1
x106 MWh

80.2 81.6
80 71.9

60

40

20

0
2013 2014 Year 2015 2016 2016
Daily Demand
Average 8200 MW 9320 MW 10510 MW
9160 MW 15000 MW
Power

Conclusion: Annual Increase in Generation capacity of 7% is insufficient

to close theSupply/Demand gap! Annual increase should be ~15% for a
few years to reduce the short fall significantly.
Page # 13
 IRAQ’S POWER SECTOR

Environmental Impact (EI)

- CO2 a by-product of fossil fuel burning is the main cause

of Global Warming (Greenhouse Effect).
- NG as a fuel has the least EI. Flammability limits in air are 5-15%
- For equal heat ( Calorific Value) output

1 Ton of Fossil Fuel Burnt Amount of CO2 Produced (Ton)

NG 2.75
HFO, Crude Oil, Diesel 3.7
- Burning of Processed Gas Produces no SOx and very low NOx
Coal 4.0
Reduces CO2 emissions by 35%.
- Using Gas as fuel for thermal power plants reduces maintenance
costs by a factor of 3. Down times are also reduced thus providing a
significant increase in availability.
- Gas as Fuel for Gas Turbines will increase Output by 20% When
Compared With Crude Oil or Heavy Fuel Oil.
Page # 14
 IRAQ’S POWER SECTOR

Iraq’s Natural Gas (NG)

Proven recoverable reserves  2.7 TCM (11th worldwide).

70% from associated gas, 20% from non-associated gas; i.e. from gas fields, 10% from
gas caps or dome gas.
Proven reserves could increase to 8.5 TCM if exploration is extended to many new areas
not yet explored. Iraq could then be fourth or fifth worldwide in proven gas reserves.
Available Raw Associated Gas in Iraq Today ~ 1900 mmscfd.
Iraq’s Current Gas Processing Capacity ~ 1000 mmscfd
 North Gas Company(NGC) Capacity 400 mmscfd (2 x 200 mmscfd trains)
 South Gas Company(SGC) Capacity 700 mmscfd
Processed Gas Currently Available and Utilized for Various Industries Including
Power Generation ~ 750 mmscfd (150 mmscfd from NGC and 600 from SGC).
Processing Capacity of 200 mmscfd in NGC Not Utilized!
Flared Gas ~ 1000 mmscfd.
Price of Iran Supplied NG per 1mmBtu is 11% of Brent Price/bbl.
Assume Brent Price = 50 USD/bbl. Then Current Value of Flared Gas at Iranian
Price is 5.4 MUSD/d ~ 2.0 BUSD/year.
Page # 15
 IRAQ’S POWER SECTOR

Estimate of Fuel Needs for Electricity Generation

Iraq’s total electricity production during 2016 was 92 x 106MWh.

Assume Average Efficiency For The Conversion of Chemical Energy In The
Fuel To Electrical Energy is 34%.
Remember 1 BOE = 5650scf = 5.69 mmbtu = 6000 MJ = 1.667 MWh.
To Produce 92 x 106MWh of Electrical Energy During 2016 Then MOE Needed
To Burn 92 x 106
= 445,000 BOE/day
1.667 x 0.34 x 365

750 mmscfd of Gas Was Burnt = 133,000 BOE/day.

Then 445,000 – 133,000 = 312,000 BOE/day of Liquid Fuel Was Burned
During 2016.
Probably 200,000 BOE/day of Crude Oil Was Burned During 2016.
Remaining 112,000 BOE/day of HFO and Diesel Fuel Was Burned
During 2016.
Page # 16
 IRAQ’S POWER SECTOR

Price of Iranian Gas

Iranian Gas Is Priced per mmbtu at 11% of Brent Price/bbl.

Assume Brent Price Today At 50 USD/bbl.
With 1 BOE = 5.69 mmbtu, Then Price of Iranian Gas = 31 USD/BOE.
Therefore, IT IS CHEAPER TO BURN IRANIAN GAS THAN TO BURN CRUDE OIL.
SAVINGS FOR 200,000 bbl/day OF CRUDE OIL WOULD BE:

2.4 MUSD/day or 876 MUSD/year

OPEC’s Decision For Ceiling On Crude Oil Production Reduced Iraq’s Crude
Oil Production By 200,000 bbl/day.
If Iraq Shifts From Burning Crude Oil To Gas Then It Can Export An Extra
200,000 bbl/day. Without Increasing Crude Oil Production Capacity And
Maintaining OPEC’s Restriction on Total Crude Production.

Page # 17
 IRAQ’S POWER SECTOR

In Conclusion My Messages Are As Follows-

1) Reduce Losses In the Electrical Distribution Networks.

2) Reduce Bottlenecks In Electricity Transmission.
3) Convert All Open Cycle Gas Turbine Power Plants to Combined
Cycle. This Would Increase Power to the Grid By At Least 3000 MW At
No Additional Fuel Cost.
4) Processed Dry Gas is the best fuel for power generation
economically, environmentally and technically. Therefore, All Fuel
Burning Power Plants Must Be Supplied With Gas.
5) The Use of Gas Would Increase Output of Existing Gas Turbine Power
Plants by at least 20% or 1200MW.
6) All Flared Gas MUST BE PROCESSED ASAP. Annual Savings of 2 BUSD
Are Foreseen.
Page # 18
 IRAQ’S POWER SECTOR

In Conclusion My Messages Are As Follows-

7) Import Iranian Gas And Substitute All Crude Oil Burning For Power
Production By Iranian Gas Thereby Saving 876 MUSD/year.
8) Increase Crude Oil Export By 200,000 bbl/day Without Affecting
OPEC’s Agreed Crude Oil Production Ceiling. Thereby, Increasing
Iraq’s Crude Oil Revenue by 10 MUSD/day or 3.65 Billion USD/year.
9) Develop All Available Free Gas Fields To Enhance Gas Availability
In Addition to Processing of Associated Gas.
10)Construct A New 150 km Pipeline to Link Taza With Mansuriya so
that Available Gas from NGC of circa 200 mmscfd could be used
for Power Generation. Also, this Pipeline will Provide an Alternative
Route to Central Iraq.

Page # 19
 IRAQ’S POWER SECTOR
Suggested New 150km 24-inch Gas Pipeline
Taza-Mansuriya

New 160 km 24 inch Pipeline

Mansuriya Power Plant

Mansuriya Spur 32-inch Pipeline

Iran-Iraq 48-inch Pipeline

Page # 20
Original Figure From Shell Draft Document “ Iraq Gas Master Plan II 7 May 2015”
 Thank You For Your Attention
Iraq Energy Forum
Hosted by IRAQ Energy Institute(IEI)

Al Rasheed Hotel Baghdad

April 2-3, 2017

The Gas Challenge for Iraq’s Electricity

Generation
Dr. Jafar D. Jafar
Uruk Engineering & Contracting Company (LLC)