Basrah Gas Company Starts Operation

South Gas Company, Shell and Mitsubishi have commenced operations of Basrah Gas Company(BGC), which will be the largest gas project in Iraq’s history and the world’s largest flares reduction project, Shell said in a statement.

Basrah Gas Company is a Joint Venture between Iraq’s South Gas Company holding 51% of its shares, 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.

Ali Khudair, South Gas Company Director General said: “Basrah produces only around 1 billion cubic feet a day of associated gas and some 700 million cubic feet are being flared, which is wasting millions of dollars of the country’s resources every day. Partnering with world class companies like Shell and Mitsubishi will help Iraq fulfil its goal of developing its gas infrastructure to eliminate flaring and provide fuel to the Iraqi industry, power generation as well as income to the state.”

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 million cubic feet per day to 2 billion cubic feet per day, Shell said.

Since the agreements were signed at the end of November 2011, SGC and Shell have increased production capacity from about 240 million scf/d to around 400million scf/d of gas throughput.