Abu Dhabi: The Iraqi Higher Energy Committee yesterday ratified a liquefied gas agreement with Shell and Mitsubishi to upgrade energy facilities and to make use of gas in southern Iraq with a $13 billion (Dh45.5 billion) in investments over 25 years.
The agreement is awaiting final approval.
"The execution of the project will start in the first quarter of 2012 and will yield $30 billion in returns to the Iraqi government and save $40 billion for the Iraqi economy by turning from burning oil to the use of natural gas," said an official.
He said the joint venture will cost $13 billion, to be paid directly by Shell and Mitsubishi and indirectly by the Iraqi government over ten years, turning Iraq into a leading producer of liquefied gas in the region. Iraq will hold 51 per cent of the project, Shell 44 per cent and Mitubishi five per cent.
Exports
The project will help Iraq to export liquefied natural gas to world markets.
This will eliminate the need for gas imports from Iran and other countries and will help operate power stations at full capacity to provide southern Iraq with power.
This joint venture is being called Basra Gas, said a statement by the Ministry of Energy, which added that the production is especially targeted for the cities in the south.
Production
The statement added that the venture will make use of 7,000 metric tonnes of LNG to produce 4,500 megawatts of electricity.
The joint venture will provide power for more than 20,000 houses.
"The project enable Iraq to make use of more than 700 million cubic feet per day of gas which is now being burnt in the southern oilfields of Rumaila, Zubair and West Qurna," it added.
