While Iraq has the potential to be one of the world’s top gas producers, it is the fourth largest gas flaring country in the world and has a shortage of natural gas for power generation, LPG and condensate.
At present, Iraq produces only around 1 billion cubic feet of gas per day, and of that some 70% is being flared because of a lack of infrastructure to capture, transport, treat and process it due to decades of wars and sanctions. To put things into perspective, we estimate that if this gas is turned into electricity, it would generate roughly 4.5 GW which is sufficient to supply some three million homes or if monetized, could inject around $3.5 billion per year into Iraq’s economy.
In addition, current level of flaring in southern Iraq equates to around 20 million tonnes per year of CO2 emissions which is equal to Croatia’s total emissions. That is equivalent to the annual greenhouse gas emissions of more than 3.5 million cars or 90,000 flights from Basrah to Hong Kong. With Iraq’s ambitious plan to increase oil production and become one of the world’s top oil producers, it is estimated that 5000 mmscf of gas per day will be produced within the next few years which makes it essential to invest in new capacities to reach this planned throughput.
In order to capture the flared resource Basrah Gas Company (BGC) was created. It is a 25-year joint venture with state run South Gas Company holding a 51% stake, Shell 44% and Mitsubishi 5%. It is a midstream gas project designed to capture, treat and monetise associated natural gas that is currently being flared in the license round 1 oil fields of West Qurna 1 (operated by ExxonMobil), Zubair (operated by ENI) and Rumaila (the largest of the three and operated by BP).
Operations officially commenced on 1st May 2013, with currently processing capacity in excess of 500 million standard cubic feet of gas per day (scf/d). In December 2014 BGC achieved a new processing record of 500 mmscf/d of gas and a new LPG production record of 2650 tonnes per day.
BGC attains a phased-approach to develop the project (rehabilitation, rejuvenation and expansion) and has a strong focus on local content employing 5,500 Iraqi staff and 400 Shell experts on secondment whilst completing more than 28,500 man days of training.