By HASSAN HAFIDH
JORDAN -- A joint venture (JV) between Iraq, Shell and
Mitsubishi will by the end of this year have doubled the amount
of natural gas it captures from three giant southern oil
fields, reducing waste and helping feed domestic power and
heating needs, a senior Iraqi oil official said.
The venture will process 500 million cubic feet/day (MMcfd)
of natural gas by the end of this year, Iraq's South Gas Co.
Director Ali Hussein Khudhier told Dow Jones
Newswires, compared with 240 MMcfd that was being captured
in November 2011 when the JV was agreed.
Mr. Khudhier was speaking shortly after Shell, Mitsubishi
and South Gas Co. officially launched their JV, Basra Gas.
State-run South Gas Co. holds 51% of the $17.5 billion joint
venture, while Shell has 44% and Mitsubishi 5%. The venture
will run for 25 years.
The three southern oil fields Rumaila, Zubair and West Qurna
1 produce 1.1 Bcfd of gas, but some 700 MMcfd of that is burned
off and wasted because infrastructure does not exist to harness
it, Mr. Khudhier said. "We are producing now 400 million
cubic feet a day and targeting 500 million cubic feet a day by
the end of 2013. We are expecting to reach 2 billion cubic feet
a day in 2017," as output from those fields expands, he
The Basra Gas Co. will produce natural gas for power stations,
and LPG for cooking and heating, Mr. Khudhier said. The JV will
meet all of Iraq's needs for LPG next year and expects to
export the fuel by the end of 2014. The venture will also
produce hydrocarbon liquids that will be sent to
refineries to process it into gasoline to raise its octane.
Mr. Khudhier said that the venture is expected to invest
some $1.5 billion in the three years after the signing on
upgrading existing gas facilities and training of
He expected the new venture to start exports of gas to the
international market in 2020, once it has met local needs. This
could be achieved through the construction of a FLNG plant and
terminal off the coast of the southern city of Basra in the
Arabian Gulf, to be built by Shell and Mitsubishi, he said.
The LNG facility is expected to cost around $3 billion, Mr.
Khudhier has said previously. The project would handle the export of
600 MMcfd of LNG, he said.
Iraq has estimated natural gas reserves of 112.6 Tcfd.
Dow Jones Newswires