Dow Jones reports that the gas capture project with Shell and Mitsubishi in Southern Iraq is expected to start production this year.
The head of the South Gas Company, Ali Hussein Khudhier, told the news agency that they expect to produce 50 Mcfd of gas this year.
He added that the floating LNG plant and terminal to be built off the Basra coast is expected to cost around $3 billion, and should be operational in 2017 or 2018. The project would export 600 MMcfd of gas in the form of LNG.
The consortium will soon invite international companies to tender to build the LNG facility.
Before this deal, Iraq was producing around 450 million cubic feet a day of gas from Rumaila, West Qurna Phase 1 and Zubair, but within two years Khudhier expects to also be capturing the 1.1 billion cfd that are currently flared.
Under the agreement, Iraq has to supply the Basra Gas Company with at least 2 Bcfd of raw gas even if it has to bring it from other fields, but it is expected that gas output from these three fields will exceed 2 billion cubic feet a day at full production.
(Source: Dow Jones)