28-01-2012 13:01:44

Basra Gas Company to produce 1.4m cu m of gas per day in 2012

Basra Gas Company, a joint venture of Iraq, Royal Dutch Shell PLC (RDSA) and Mitsubishi Corp., is expected to produce about 1.4 million cubic meters of gas per day in 2012, head of the South Gas Co., affiliate of the Iraqi Oil Ministry, Ali Hussein Khudhier said in an interview with Dow Jones.

The joint venture is expected to start production this year.

In November 2011 the Iraqi Cabinet approved a deal, which creates Basra Gas Company worth $17 billion, a joint venture to process associated gas from the Rumaila, Zubair and West Qurna-1 fields.

According to the joint-venture agreement, Iraq has to supply at least 2 billion cubic feet (57 million cubic metres) a day of raw gas to the Basra Gas Co. even if it has to bring it from other fields other than the three mentioned.

"We are, however, expecting gas output from these three fields to reach more than 2 billion cubic feet a day when they reach their production plateau as mentioned in the contracts signed with firms developing these fields," Khudhier said.

State-owned South Gas Company will hold a majority 51% stake in Basra Gas, while Shell will have 44% and Mitsubishi 5%.

According to BP, the proven oil reserves in Iraq as of early 2011 amounted to 115 billion barrels, which makes the country the third after Saudi Arabia and Iran.

In 2010, according to BP, oil production in Iraq was 2.4 million barrels of oil per day, which is 0.6 percent more than in 2009.

Major oil fields of Iraq are Rumaila, Zubair, Nahr Umr, Majnoon and West Qurna in south of the country. Some 80 percent of oil produced in the country is exported. Iraq supplies oil to Jordan, Turkey and Syria.

TAGS: Basra Gas Company, Iraq, Royal Dutch Shell PLC, Mitsubishi Corp., Ali Hussein Khudhier, Rumaila, Zubair, West Qurna-1 fields