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Shell and South Gas at design phase on first Iraq LNG Plant

Saipem won FEED for Basra Gas LNG Export Terminal 

Basra Gas Company (BGC), the joint venture between the local South Gas Company (South Gas), Royal Dutch Shell (Shell) from The Netherlands and Mitsubishi Corporation (Mitsubishi) from Japan, awarded the front end engineering and design (FEED) contract to the Italian engineering company, Saipem for the construction of the first liquefied natural gas (LNG) export terminal to be located in the south of Iraq.

In May 2013, Iraq Government finally approved the creation of BGC joint venture to support the world largest program to reduce flared gas.

Shell_South-Gas_BCG_Iraq_LNG-Plant_Saipem_FEED_MapIraq counts the 10th largest reserves of conventional gas in the world.

From historical reasons, all the gas produced in Iraq is associated to the crude oil production and because of the lack of infrastructures after the two consecutive wars, a significant part of this associated gas is just flared as to facilitate the vital crude oil production.

Only the Basra region is producing 1 billion cubic feet per day (cf/d) of associated gas out of which 70% are just flared.

The consequences of such quantities of flared gas on the environment and the Iraq economy is no longer affordable while this country is currently importing liquefied petroleum gas (LPG).

With a $17 billion capital expenditure program initiated in 2012, South Gas, Shell and Mitsubishi have launched series of projects to revamp existing infrastructures, gather the associated gas flared in oil production fields.

Shell and South Gas to export LNG to stop flaring gas

In priority BGC is targeting three giant fields in the south of Iraq, Rumaila, West Qurna-1 and Zubair.

These fields on their own generate 700 million cf/d of gas being flared.

In this context South Gas, Shell and Mitsubishi  are planning series of central processing facilities (CPF) that should have a capacity of 2 billion cf/d of gas.

Shell_South-Gas_Mitsubishi_Basra-Gas_LNG_Export_Terminal_Saipem_FEED_ProjectThese gas plants will produce natural gas and condensate in quantity enough to meet the demand on the domestic market and to export.

Of course the Iraq Authorities intend to give priority to the local market in order to develop the local economy through power generation and petrochemical industries.

But these downstream activities may take time to be developed as depending on number of other parameters than just capital expenditure.

Therefore the export of any available gas through an LNG terminal would provide Iraq with net resources while its saves gas flaring practices in the meantime the downstream sector should be ramped up.

At this stage, BGC is considering the Basra Gas LNG project to have a capacity at least of 4.5 million tonne per year (t/y) of LNG.

In this context, Shell, Mitsubishi and South Gas are moving ahead through their joint venture Basra Gas in awarding the FEED contract to Saipem for this first Iraq LNG plant in order BGC to stop flaring associated gas in the Basra region by 2017.

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

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