The Iraqi Higher Energy Committee confirmed an LNG agreement with multinational oil and gas companies Shell and Mitsubishi of $13 billion (Dh45.5 billion) to develop and enhance the southern gas fields of Zubair, Rumaila and West Qurna near Basra throughout 25 years. However, the agreement is yet to be approved by the Iraqi cabinet.
The ‘Basra Gas’ project, which will be executed in the first quarter of 2012, will save $40 billion of the Iraqi economy as it will switch to the use of natural gas, a more practicable form, rather than being burnt in the southern oilfields of Rumaila, Zubair and West Qurna. In the initial period of investment, the project’s fruits will amount to $30 billion in returns to the Iraqi government.
Shell and Mitsubishi will pay up the cost of the project of $13 billion, while Iraq will contribute indirectly to the joint venture by compensating over a period of ten years. This project will mark Iraq as a major producer of LNG in the region. The joint venture will have 51% of Iraq’s share while Shell will hold 44%. Mitsubishi will contribute with a 5% share.
Effects of the joint venture:
- The project will aid Iraq to chip into the world gas supplies.
- It will eliminate the need to import gas from Iran.
- The project is specially designed to provide power to 20,000 houses to the cities in southern Iraq.
- The venture will make use of 7,000 metric tonnes of LNG to produce 4,500 megawatts of electricity.
Aerial Footage of Al Basra Oil Terminal
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