Gas Flaring Reduction in Iraq: The Refining and Petrochemical Opportunity Energy Leaders Cannot Ignore
Energy strategy is often discussed in terms of new discoveries, new fields and new technologies. Yet one of the biggest opportunities in Iraq's energy sector requires no exploration at all. It is already at the surface, burning in flare stacks across the country's oilfields.
Gas flaring reduction has become a strategic priority for Iraq, and for good reason. The gas now being burned could fuel power stations, supply refineries, feed petrochemical plants and support thousands of jobs. For energy executives, project leaders and technical managers, the question is not whether to act, but how to lead the change effectively.
This article explores the size of the opportunity, the lessons from projects already under way, and the leadership and technical capabilities that will determine success. Professionals preparing for this shift can build their expertise through Anderson's Refining and Petrochemical Training Courses.
A Strategic Resource Hiding in Plain Sight
Associated gas is produced naturally alongside crude oil. Where gathering and processing systems do not exist, it is burned at the site. Globally, this is a growing problem: the World Bank reports that flaring increased for a third consecutive year to 167 billion cubic metres in 2025, the equivalent of around $54 billion in lost gas.
Iraq is a major part of that picture. The World Bank grouped Iraq with Russia and Iran as the heaviest flarers in 2025, together burning some 84 billion cubic metres, close to half of the world total.
For decision-makers, the more telling statistic is this: nine countries, Iraq among them, generated 83% of global flaring in 2025 while producing just 46% of the world's oil. That imbalance signals inefficiency, and inefficiency signals opportunity.
The Cost of Doing Nothing
Continuing to flare carries costs that reach far beyond the oilfield.
Energy security. Iraq is OPEC's second-largest producer after Saudi Arabia but has remained a net gas importer, having flared roughly half of its estimated 3.12 billion cubic feet per day of gas production until 2023. It has depended on polluting liquid fuels for power generation and on expensive gas and electricity imports from Iran.
Lost industrial value. Iraq imports petrochemicals and gas-based products that could be manufactured domestically, while industries that need affordable gas remain underdeveloped.
Environmental and reputational risk. Flaring worldwide produced an estimated 429 million tonnes of CO2-equivalent emissions in 2025, including about 50 million tonnes of unburned methane. As investors and international partners focus more closely on emissions, flaring increasingly affects access to finance and partnerships.
Why Petrochemicals Are the Bigger Prize
Most discussion of Iraq's flared gas focuses on electricity, and rightly so. But the greater long-term value lies further down the chain.
Associated gas in southern Iraq is typically rich in heavier components. Once processed, it yields:
- Methane, used for power and as feedstock for ammonia, urea and methanol
- Ethane, the preferred feedstock for ethylene crackers
- Propane and butane, sold as LPG or used to make propylene and other chemicals
- Condensate, a light liquid that can be refined into fuels and naphtha
Each step up the value chain multiplies the worth of the original molecule. Gas burned as fuel earns one price; the same gas converted into polymers, fertilisers or specialty chemicals can earn many times more, while creating skilled jobs in manufacturing, logistics and services.
This is why integrated planning matters. A gas capture strategy that connects upstream fields with refineries and petrochemical complexes creates far more economic value than one designed only to fuel turbines.
Lessons from Basra's Flagship Projects
Two projects in southern Iraq offer practical lessons for leaders.
Lesson 1: Partnerships Unlock Scale
Basrah Gas Company, a joint venture of South Gas Company (51%), Shell (44%) and Mitsubishi (5%), shows how public-private partnership can mobilise capital and expertise. Since 2013, it has gathered and processed gas that was previously flared, producing dry gas for the grid alongside LPG and condensate for local use and export. It is now expanding capacity from 1 bcf/d to 1.4 bcf/d through its BNGL project.
Lesson 2: Integration Creates Resilience
TotalEnergies' Gas Growth Integrated Project, with Basra Oil Company and QatarEnergy, bundles gas recovery for power, Ratawi field redevelopment, a 1 GWac solar farm and a seawater treatment scheme into one programme. Its gas plant is intended to supply about 1.5 GW of generation, serving roughly 1.5 million households. By linking energy, water and power, the project addresses several national challenges at once.
Lesson 3: Coverage Gaps Remain
Even the most successful programme has limits. BGC draws raw gas from just three major fields: Rumaila, Zubair and West Qurna 1. Scaling gas capture across Iraq will require replicating these models at many more sites, often with smaller volumes and tougher economics.
Lesson 4: Finance Follows Credibility
In 2025, the IFC was mandated to arrange up to $500 million in further financing for BGC's flare reduction work. International lenders back projects with strong governance, transparent reporting and capable management teams.
What Leaders Must Get Right
Successful gas flaring reduction depends on five leadership priorities:
- A clear national and corporate strategy that links gas capture to power, refining and petrochemical growth
- Commercial structures with fair pricing, reliable offtake contracts and payment security
- Data and transparency, starting with accurate measurement of flared volumes at every field
- Execution discipline in project management, contracting and cost control
- Workforce capability at every level, from control room to boardroom
The fifth priority underpins all the others. Strategies fail without people who can execute them.
The Capability Challenge
Refining and petrochemical facilities are complex, capital-intensive and unforgiving of mistakes. They operate at high temperatures and pressures, handle hazardous materials and run on narrow margins. Performance depends on:
- Technical depth: understanding processes such as gas sweetening, fractionation, cracking, reforming and polymerisation
- Operational excellence: maintaining stable, efficient, on-specification operation
- Process safety leadership: building cultures that prevent major incidents
- Commercial awareness: understanding feedstock economics, product margins and market dynamics
- Change management: leading organisations through new technologies, partnerships and ways of working
Demand for these capabilities is rising quickly. GGIP construction alone was expected to employ 7,000 Iraqi nationals, and each new facility will need experienced teams to run it for decades.
Develop Leaders and Specialists with Anderson
Anderson's Refining and Petrochemical Training Courses are designed to build both technical competence and leadership capability across the downstream sector.
Programmes in the portfolio address areas such as:
- Refinery and petrochemical process fundamentals and configurations
- Gas processing, NGL recovery and feedstock management
- Petrochemical value chains, from olefins and aromatics to polymers
- Refinery and petrochemical economics, planning and margin optimisation
- Process safety management and operational risk
- Energy efficiency, emissions reduction and flare minimisation
- Asset integrity, reliability and turnaround management
- Leadership and decision-making in downstream operations
Delivered by experienced industry practitioners, the courses combine technical insight with case studies and practical tools. They are suited to executives, managers, engineers, planners and specialists in national oil companies, refineries, petrochemical plants, EPC contractors and government energy bodies.
Frequently Asked Questions
What does gas flaring reduction mean?
It means capturing and using associated gas from oil production instead of burning it, typically for power, fuel, industrial feedstock or reinjection.
Why is Iraq's flared gas valuable for petrochemicals?
Associated gas contains ethane, propane, butane and condensate, which are key feedstocks for petrochemical plants and refineries.
What are Iraq's main gas capture projects?
Basrah Gas Company and TotalEnergies' Gas Growth Integrated Project, both in Basra, are the largest.
Who should attend refining and petrochemical training courses?
Executives, managers, engineers, operators, planners and HSE professionals in refining, petrochemicals, gas processing and energy policy.
Leading the Transition
The flames above Iraq's oilfields represent one of the region's largest untapped industrial opportunities. Capturing that gas can strengthen power supply, grow refining and petrochemical output, reduce emissions and create lasting jobs. Doing so will take capital, partnerships and policy, but above all it will take capable leaders and skilled professionals.
Prepare your organisation to lead. Explore Anderson's Refining and Petrochemical Training Courses and register your team today.