Iraq Sunday has signed the final USD 17.2 billion deal with Royal Dutch Shell PLC and Mitsubishi Corp. to capture and process flared gas from southern Iraqi oil fields. The joint venture, which includes Iraqi state South Gas Co., is expected to help Iraq make use of more than 700 million cu/ft a day of gas that is being burned and help generate much-needed electric power.
The 25-year contract is one of the biggest deals that Iraq has signed with international energy companies over the past two years. An Iraqi oil official in Baghdad confirmed the signing, which was attended by Iraqi Oil Minister Abdul Kareem Luaiby, the prime minister’s top energy adviser Thamer Ghadhban and Shell chief executive Peter Voser and Mitsubishi’s senior vice president Tetsuro Kuwabara.
The 25-year contract is one of the biggest deals that Iraq has signed with international energy companies over the past two years. An Iraqi oil official in Baghdad confirmed the signing, which was attended by Iraqi Oil Minister Abdul Kareem Luaiby, the prime minister’s top energy adviser Thamer Ghadhban and Shell chief executive Peter Voser and Mitsubishi’s senior vice president Tetsuro Kuwabara.
The deal creates the Basra Gas Co. joint venture, made up of Iraq’s state South Gas Co., which holds 51% of the venture, Shell, which has 44%, and Mitsubishi, which holds the remaining 5%. It will collect raw associate gas from three supergiant Iraqi oil fields Rumaila, Zubair and West Qurna phase 1 in southern Iraq, and process that gas into valuable products, initially for sale domestically in Iraq. Some USD 12.8 billion would be spent on infrastructure and USD 4.4 billion on construction of a liquefied natural gas facility.