Iraq’s natural gas sector is defined by a difficult contradiction. The country has about 131 trillion cubic feet of proved gas reserves, yet it still struggles to supply enough usable gas to its power stations. Large volumes are burned at oil fields, while the electricity sector continues to depend on imported gas and electricity from Iran.
Around two-thirds of Iraqi output is associated gas, which comes to the surface during oil production. Southern oil fields therefore produce large quantities of gas, but gathering systems, pipelines, processing plants, and connections to power stations have not expanded at the same speed as crude oil output.
In 2023, Iraq produced about 372 billion cubic feet of dry natural gas but consumed approximately 682 billion cubic feet. At the same time, around 625 billion cubic feet was flared. Iraq’s problem is not simply a lack of gas underground. It is the limited ability to capture, process, transport, and use the gas already produced alongside oil.
This gap has direct economic effects. Gas shortages force some power stations to burn crude oil or fuel oil, reducing exportable supplies and creating more pollution. They also leave electricity generation exposed to interruptions in imports during periods of high demand or regional tension.
Southern Oil Fields Are the Centre of Iraq’s Gas Strategy
Basra and the surrounding oil-producing areas are the centre of Iraq’s effort to reduce flaring. The Majnoon, West Qurna, Ratawi, and other major fields produce associated gas as part of normal operations. Capturing it requires a connected midstream system rather than a single new field.
Basra Gas Company is one of the most important operators in this process. The joint venture involving Iraq’s South Gas Company, Shell, and Mitsubishi collects gas from southern fields and separates it into dry gas, liquefied petroleum gas, and condensate. Its Basra Natural Gas Liquids project is intended to capture more gas from fields including Majnoon, West Qurna-2, and Ratawi.
Other projects are widening the network. The Halfaya gas processing plant added around 110 billion cubic feet per year of capacity in 2024. A facility at Faihaa added further capacity, while projects at Nassiriya and Bin Omar are intended to process gas from additional southern fields.
These plants can replace imported fuel in power generation, increase domestic LPG supply, and create additional condensate output. Iraq plans to raise gas processing capacity from roughly 700 billion cubic feet in 2024 to more than 1.1 trillion cubic feet by 2030. Reaching that level will depend on projects starting on schedule and pipelines being completed between fields, plants, and power stations.
The Gas Growth Integrated Project Links Flaring to Electricity
The Gas Growth Integrated Project is the largest single programme within Iraq’s current gas strategy. Led by TotalEnergies with Basrah Oil Company and QatarEnergy, it combines gas capture, oil development, solar power, and a seawater treatment system.
Its gas component is designed to recover associated gas from southern fields instead of allowing it to be flared. The first large processing phase is planned at 300 million cubic feet per day, enough to supply power plants with about 1.5 gigawatts of generating capacity. An early unit was also developed to process 50 million cubic feet per day from the Ratawi field.
The project matters because it connects upstream oil expansion with the infrastructure needed to manage additional gas. Oil fields require treated seawater to support reservoir pressure. Higher oil production creates more associated gas. That gas can be processed and sent to power stations, while solar generation adds another source of electricity.
The value of this model will depend on execution. Contract disputes, financing difficulties, administrative delays, security conditions, and incomplete infrastructure have slowed Iraqi energy projects before. The new gas facilities must also connect reliably to the national network if they are to reduce imports.
Iranian Imports Remain Important to Iraq’s Power System
Natural gas demand in Iraq is closely tied to electricity. Almost all national power generation comes from oil and gas, and many generating stations were designed to operate with natural gas. Yet fuel shortages and weak transmission infrastructure prevent the system from meeting peak demand.
Federal Iraq had an estimated 25 gigawatts of available peak electricity supply in 2024, compared with summer demand of around 48 gigawatts. Fuel availability is one major part of the gap. Power plants may operate below capacity when imported gas is interrupted or domestic gas cannot reach them.
Imports from Iran have helped Iraq run gas-fired plants, especially around Baghdad and central Iraq. They have also created a strategic dependency. Payment arrangements are affected by sanctions, and Iranian supply can fall when Iran needs more gas for its own market.
Capturing flared gas is the most direct route toward reducing this dependency. However, gas capture alone will not solve the electricity problem. Power stations need maintenance, transmission losses must fall, and new generation must be built where both fuel and grid capacity are available.
Independent Gas Fields Could Broaden Domestic Supply
Associated gas will remain central, but Iraq is also developing fields where natural gas is the main resource. These projects can provide more stable output because production is not tied directly to oil-field operating levels.
Akkas in Anbar Province is one of the country’s main non-associated gas prospects. Partial production began to support a nearby power station, but full development has faced repeated security and investment delays. Mansuriya, north-east of Baghdad, is another priority and is intended to supply the Mansuriya power plant. These fields could improve fuel availability in western and central Iraq.
The Kurdistan Region has developed a separate gas centre at Khor Mor. Its gas supplies power stations in Erbil, Chemchemal, and Bazian. The KM250 expansion was commissioned in October 2025, raising processing capacity to 750 million cubic feet per day. Output passed 700 million cubic feet per day in January 2026.
Khor Mor shows the value of linking a producing field directly to power generation. It also shows the limits created by security risks and incomplete pipelines. Moving more Kurdish gas into federal Iraq, Türkiye, or wider markets would require new transport infrastructure and stable commercial agreements.
Iraq’s 2028 Flaring Target Depends on Midstream Delivery
Iraq has moved its target for ending routine gas flaring to 2028. The target is ambitious because the country remained one of the world’s largest flaring states in 2024. Progress will be measured less by announcements than by the amount of gas that reaches processing plants and power stations.
Basra Gas Company expansions, Halfaya, Faihaa, the Gas Growth Integrated Project, Nassiriya, Bin Omar, Kirkuk redevelopment, Akkas, and Mansuriya could turn natural gas from a wasted oil-field by-product into a larger domestic industry.
Iraq’s likely path is not toward major gas exports in the near term. The immediate market is at home. Electricity demand is large, imported supply remains politically exposed, and liquid fuels are still burned in power plants. If the gathering, processing, and pipeline systems now under development are completed, natural gas can become one of the main tools for improving power reliability and retaining more value from oil production.
