NEW DELHI : India is planning to build a liquefied natural gas (LNG) terminal in Iraq as it looks to diversify supplies and strengthen its energy security, a government official said. The terminal will liquify some portion of the gas currently flared by Iraq and transport it to India, where it will be converted back to LNG for use in city gas distribution as well as power, fertilizer, and steel sectors.

The proposal came up during last month’s India-Iraq Joint Commission Meeting in Delhi. India already has strong ties with Iraq, particularly in energy trade with Baghdad being a top source of Delhi’s crude oil imports.

 “Iraq flares a lot of natural gas and we are a large importer of gas. So, we are exploring if our companies can set up plants in Iraq to liquefy that gas into LNG,” said the official, who did not wish to be identified. As per estimates by global agencies, Iraq flares around 50 million standard cubic metres per day (mscmd) of natural gas. In 2022-23, India’s LNG imports stood at 19.9 million tonnes, which is equivalent to 71.6 mscmd of natural gas.

Over the past couple of years, Iraq has committed in international fora that it will make efforts to reduce gas flaring at its facilities, given that flaring leads to high intensity pollution and waste or precious natural resources. Meanwhile, Indian gas companies, particularly GAIL (India) Ltd and Petronet LNG Ltd have been scouting for opportunities to set up or invest in gas liquefaction plants in other countries.

The official quoted above, however, did not name the Indian companies that may be looking at building liquefaction facilities in Iraq. The estimated timelines are also not clear, considering various impediments, particularly the security situation in Iraq.India depends on imports to meet about half of its natural gas requirement. India, like many other countries, views natural gas as a key transition fuel as it makes efforts to accelerate its move to green energy. The Narendra Modi Government has set an objective to increase the share of natural gas in India’s primary energy mix to 15 per cent by 2030 from a little over 6 per cent at present. This means that India’s natural gas demand is likely to grow considerably over the next few years, which in turn means that imports will also increase substantially.