The Natural Gas of the Kurdistan Region of Iraq Between Local and Regional Balances

Executive Summary
• The recent global developments and Russia’s invasion of Ukraine have spotlighted the natural gas sector in the Kurdistan Region of Iraq (KRI) as a potential alternative to Russian natural gas for Europe.
• The natural gas sector contributes to placing the KRI on the global energy map and attracts the attention of major countries to work on developing this sector and ensuring a continuous energy flow.
• According to data from the KRI’s Ministry of Natural Resources, the region holds approximately 3% of the world’s gas reserves, a figure that ranks the KRI tenth globally in terms of gas ownership.
• Data related to the gas sector in the Kurdistan Region of Iraq is inconsistent, with discrepancies between information and reports released by central government institutions, and the limited data provided by the Kurdistan Regional Government. This is further complicated by inconsistent figures from both local and international private companies concerning this sector.
• Since 2007, the Kurdistan Regional Government has focused on the gas sector and has successfully leveraged it to meet domestic electricity needs.
• Linking the energy sector to political disputes hampers the development of the gas sector in the KRI, particularly given the ongoing disagreements between Erbil and Baghdad and the lack of a clear path to resolution.
• Advancing the gas sector in the KRI would enable Iraq to reduce its dependence on Iranian gas and assist the Iraqi government in meeting its electricity needs by relying on gas from the area.
• Internal Kurdish disagreements between the governing parties in the KRI represent one of the most significant obstacles to the development of the gas sector. The success of this endeavor requires comprehensive cooperation between both parties.
• Iran views the energy developments in the KRI, particularly the gas sector, with concern due to the potential for the Region’s gas to serve as an alternative supply.

The Russian invasion of Ukraine has thrust the issue of natural gas back into the forefront of international relations. Europe relies on Russia for nearly 40% of its gas needs, prompting the continent to seek safer alternatives to Russian gas. While options like coal and nuclear energy are available, environmental and climate concerns surrounding these sources make them less desirable. Rising costs of available alternatives, such as liquefied natural gas from the United States and Qatar, have also posed challenges. Meanwhile, Africa has emerged as a potential gas supplier to Europe, some countries in Africa have significant gas reserves, in addition to existing export pipelines directed toward Europe, but production and transportation capabilities in the continent often fall short. Amid these complexities, the Kurdistan Region of Iraq has boldly positioned itself as a prospective gas supplier. Plans are in place, and efforts are underway, to connect the Region’s production fields to the global market via Turkey, and the final stages of this infrastructure are being finalized.
Another factor propelling Iraq’s Kurdistan Region onto the list of potential suppliers is its substantial natural gas reserves, estimated at around 3% of the world’s total, according to official data from the KRI. Currently, this natural gas is produced on a limited scale to meet domestic electricity needs. However, should the Region develop its energy infrastructure and prepare for gas exports, particularly to Turkey and Europe amid the current crises, it will strengthen its domestic standing and increase its regional and international influence. This is especially true if an export plan is successfully implemented that takes into account local and regional balances and avoids the mistakes made in the oil sector, which became an economic burden and a source of ongoing financial issues with Baghdad. These obstacles could be re-evaluated and minimized with pressure and support from global powers, especially the United States, as well as regional forces like Turkey and the Arab Gulf states, which are in a phase of normalizing diplomatic and political relations.
The paper at hand aims to address various topics related to the natural gas sector in Iraq’s Kurdistan Region. These topics include the early fieldwork initiated by the Kurdistan Regional Government (KRG) in this sector, along with the internal, regional, and international challenges facing it. The paper also delves into statistics related to natural gas reserves and highlights the most significant discovered fields within the Region. Furthermore, it discusses the visits made by the President of the KRI and KRG Prime Minister to several regional countries, such as the United Arab Emirates, Qatar, and Turkey, where they have spoken on multiple occasions about the gas sector taking into account the key possibilities for Iraq and the KRI to benefit from potential developments in the Region’s gas infrastructure, also exploring the challenges and obstacles that the KRI gas sector faces at both domestic and regional levels.
The paper also aims to provide a clear vision of the reasons behind Iran’s concerns about the development of the gas sector in the KRI, and the risks and challenges that would face the Kurdistan Region of Iraq in the event of proceeding with the development of the gas sector and competing with regional parties within Iraq.

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