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India’s LNG terminal plans in Iraq face visa hurdles


Plans to set up a liquified natural gas terminal in Iraq are yet to take off, as Iraq is yet to issue visas to officials from Indian oil and gas and EPC (engineering, procurement and construction) companies amid persistent security concerns in the country.

A team of officials from state-run companies, including Indian Oil Corp (IOCL) and Engineers India Ltd (EIL), were to visit Iraq and weigh the prospects of an LNG terminal which would also operate as a gas liquefaction plant.

“They are yet to issue visas. No significant movement has taken place from the Iraqi side as of now. Things will only move forward when our team visits the country," said a person aware of the development, adding that there is no certainty on the timeline for the proposed visit.

Queries sent to the union ministry of petroleum and natural gas, Iraq’s embassy in India, IOCL and EIL remained unanswered till press time.

It has been about eight months since the project was proposed by Iraq in the last joint commission meeting (JCM) in New Delhi held during the visit of Iraq’s deputy prime minister for energy affairs and oil minister Hayan Abdul Ghani Abdul Zahra Al Sawad in June 2023. On 11 July 2023, Mint reported that a team from India would shortly visit the Gulf nation.

The idea of the terminal was conceived to liquify some of the 50 million metric standard cubic metres per day (mmscmd) of gas currently flared by Iraq and transport it to India, where it would be converted back to LNG for use in city gas distribution (CGD) as well as power, fertilizer, and steel sectors. When natural gas is brought to the surface but cannot be processed soon enough, it is burned away, commonly called flaring. Flaring is done primarily when gas turns up as a by-product of crude oil extraction.

“The project would be a win-win situation for both the countries. Iraq would be able to optimally utilize the gas it generally flares up and earn revenue and India has also been looking at newer sources of gas at cheaper prices," said a second person.

India looking at diversifying its LNG import sources to curb market volatility.

After a gap of almost 10 years, the 18th India-Iraq joint commission meeting was held in New Delhi on 20 June, 2023. India had also reached out to Iraq at a government-to-government level as part of an outreach including the US, UAE, and Saudi Arabia for additional LNG cargoes at affordable prices.

Gazprom Marketing and Trading Singapore, a former subsidiary of Russian gas giant Gazprom, had agreed to supply GAIL (India) Ltd 2.5 million tonnes of LNG every year for 20 years starting 2018-19. The supply began in June 2018 but remained disrupted for a year after the Russian invasion of Ukraine. This forced the Indian state-run company to buy expensive spot cargoes, prompting the government to look for newer LNG sources.

Source: Live Mint 

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