Basrah Gas Company, which will be the largest gas project in Iraq’s history and the world’s largest flares reduction project, has officially been launched in Iraq. The company is a 25-year incorporated Joint Venture between Iraq’s South Gas Company (51%), Shell (44%) and Mitsubishi Corporation (5%). The Joint Venture captures associated gas that is currently being flared from three oil fields in southern Iraq – Rumaila, West Qurna 1 and Zubair. Basrah produces only around 1000 mcf/d (10.3 bcm/year) of associated gas and some 700 mcf (7.2 bcm/year) are being flared.
Under the agreement signed with the Iraqi Ministry of Oil, BGC will sell processed gas to state-owned South Gas Company. BGC will be dedicated to the rehabilitation and upgrade of the current facilities to put them back to work safely as well as building new assets which is expected to increase the production capacity from a current 400 mcf/d (4.1 bcm/year) to 2 bcf/d (20.6 bcm/year). Lastly, a number of critical projects have already started, like the new power plant at the Khor Al Zubair (KAZ) gas plant, compressor stations in North Rumaila, as well as leasing compressors to reduce gas flaring in the Zubair field. In the future, the project also includes the option to build an LNG plant for potential export once domestic energy needs are met, which will create a new income stream and help the country increase the pace of its economic growth.
Iraq has estimated natural gas reserves totalling 112.6 tcf (3,190 bcm), the 10th largest in the world. However, due to decades of wars and sanctions that led to the deterioration of the gas infrastructure, preliminary estimates indicate that Iraq’s losses from gas flaring could amount to billions of dollars annually.