Akkas gas field

The Akkas gas field (also known as Salah Al Dine) is situated in the western deserts of Iraq, in the al-Anbar province. It lies 30 km south of Al Qaim city on the Syrian border. The Akkas structure is approximately 30km long and 12km wide.

al-Anbar province was once a hotbed for insurgents, with one Iraq official referring to the area as "the same source, for al-Qaida and gas." However, security was reported to have improved in 2010 as Al-Qaida was chased to neighbouring territories. An Iraqi oil official acknowledged to Iraq Oil Report the difficulty of operating in the area, though Iraqi and American security officials dismissed concerns.

The field hold the country's largest reserves of gas, with 5.6 trillion cubic feet (tcf). Iraqi officials have said that the priority for the gas will be domestic consumption, mainly for power generation, but has left open the possibility of allowing exports once domestic needs are satisfied.

= Contract Negotiations =

In May 2010, the government announced Akkas would be part of the third licensing round, which would focus on Iraq's gas reserves. The original deal awarded to consortium partners Kogas and KazMunayGas was long delayed amid negotiations between different stakeholders, however the deal to develop the deposit was finally signed in October 2011 under an amended ownership structure. Under the terms of the original bid, the plateau production target was 100 MMscf (million standard cubic feet) per day and the proposed remuneration fee was $7.50 per barrel of oil equivalent (boe) produced.

In May 2011, KazMunayGas pulled out of the venture, leaving Kogas as the sole investor and operator and forcing the company to double its share in the project. A new deal was then negotiated and signed in October 2011 between Kogas and the Iraqi Oil Ministry. The company committed to increasing production to 400 MMscf per day within seven years and holding that output for 13 years, earning a $5.50 remuneration fee for each boe produced.

According to Iraq Oil Report the Akkas deal faces several political obstacles on a local and national level. In particular, Anbari leaders demanded that all gas from the field stay within the province to serve existing and future local demand, rather than being exported. The governor of Anbar threatened to withhold security and logistical support for foreign contractors if the deal went through and warned that, as a measure of last resort, the province could assert autonomy from Baghdad.

= Production and Export =

According to Iraq Oil Report, there is a planned power plant linked to the Akkas project, as well as a provision establishing a maximum number of years during which the gas produced can be sent to a processing facility in Syria before a comparable domestic facility at Akkas must be ready.

The issue of future exports from the Akkas field has caused some discussion in Iraq. Being located close to the Syrian border, Akkas is an attractive source of gas for the 'Southern Corridor' pipeline project, which needs a guaranteed supply of gas to compete with Russian pipelines feeding European customers. According to Iraq Oil Report, Baghdad officials promised Iraqi gas for Nabucco, but only after local demand for refined products and electricity has been met.

= References =