Tag Archive | "Basra Gas Company"

Fugro Wins Contract Extension by BGC

Fugro has been awarded a three year contract extension by Basra Gas Company (BGC).

The contract covers the provision of topographic and geotechnical services in the Basrah province of Southern Iraq, as well as bathymetric surveys and metocean services.

Since being awarded the contract in March 2014, Fugro has provided geotechnical and topographical survey investigation services to support engineering projects for an onshore NGL plant, new pipelines and anticipated expansion of gas compression facilities.

Amongst the resources provided by Fugro are two geotechnical rigs and four survey teams on a permanent basis, supplemented by additional teams as required.

The extension of the contract provides continuity of quality enabling BGC to meet its current and future requirements. It also underpins Fugro’s commitment to the continued development of Iraq’s rebuilding process.

(Source: Fugro)

Posted in Construction & Engineering, Oil & GasComments (5)

Iraq has Lost Billions from Gas Flaring

By John Lee.

The former head of the Energy Studies Department at the Opec Secretariat in Vienna has said that delays in capturing associated gas from Iraq’s oilfields is costing the country billions of dollars.

Saadallah Al Fathi told GulfNews.com that the Basra Gas Company (BGC) is very slow in rehabilitating and maintaining the plants at North Rumaila and Khor Zubair.

The Basra Gas Company (BGC) is a $17.2-billion joint venture set up in November 2011 to gather and process gas from the three southern oilfields of Rumaila, West Qurna 1, and Zubair; it is owned by the Iraqi South Gas Company (SGC) (51%), Shell (44%) and Mitsubishi (5%).

Al-Fathi added:

Only in April 2014 did the company award the technical studies of a new gas plant in Ratawi of 500 mcfd capacity, which would cost $2 billion. But it is too little compared with gas production now assuming current facilities are completely rehabilitated.

“By the time the plant is ready, it will probably be five years from now and gas flaring would continue. Iraq probably needs four of such plants if flaring is to be avoided and electricity demand is satisfied.

“This is what prompted the IEA in June 2012 to say that the implied value of the gas flared to 2020 would be $70 to $100 billion and that ‘This lost value provides a compelling reason for Iraq to move as quickly as it can to make early additions to gas processing capacity’.”

(Source: GulfNews.com)

Posted in Oil & GasComments (12)

Petrojet Wins Major New Iraq Contracts

By John Lee.

Egypt’s state-owned Petroleum Projects & Technical Consultations Company (Petrojet) has reportedly won two contracts in Iraq valued at $142.5 million (166 billion Iraqi dinars).

In the first contract, worth $75 million, Petrojet will carry out the first phase of the rehabilitation and upgrade of the current facilities in Basra Gas Company, for the benefit of Shell, the South Gas Company and Mitsubishi. The work is to be completed within 24 months.

The second contract, valued at $67.5 million, will see Petrojet responsible for the civil, installation, and mechanical works on the degassing station facility for Eni’s Zubair oilfield in cooperation with Samsung Engineering Company. The work is scheduled to take 16 months.

(Source: Amwal al Ghad)

Posted in Oil & GasComments (8)

Fugro wins Contract from Basra Gas Company

Fugro has been awarded a contract for one year, plus a year extension option, by Basra Gas Company (BGC) for the provision of Geotechnical Investigations and Topographic Services in the Basrah province of Southern Iraq.

Fugro will provide geotechnical and topographical survey investigation services at various locations throughout the project area to support a number of planned engineering projects for an onshore LNG plant, new pipelines, and anticipated expansion of gas compression facilities.

From the planning through to the decommissioning stages of the project, engineering survey support will be provided in the form of route, profile, setting out and as-built surveys for pipelines, cables, utility services, roads, and overhead power lines.

Geotechnical investigations will be carried out for engineering and foundation design of new structures and review of existing structures in the project area, with all geotechnical laboratory testing performed at Fugro’s accredited laboratory in Basrah.

The award builds on the work previously undertaken by Fugro Iraq in support of Basrah Gas Company’s gas development activities in the Basrah province of Southern Iraq.

The contract award supports Fugro Iraq’s commitment to the continued development of Iraq’s rebuilding process.

(Source: Fugro)

Posted in Construction & Engineering, Oil & GasComments (1)

Capital Gain Tax on IOCs in Iraq

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Many countries impose capital gain tax on individuals, companies and corporations when a profit realized from the sale of assets. National and state legislation often has a large array of fiscal obligations and regulations regarding capital gains, however, these fiscal obligations may vary from jurisdiction to jurisdiction.

In other words capital gain tax is a normal component of taxation systems on both national and international levels, and thus has a significant contribution to the state revenues and fiscal policies. Iraq is no different and should consider doing the same.

In Iraq the signed service contracts provide the IOCs with a possibility to assign (sell) wholly or partly their participating interests as specified by a common clause in the signed contract, “any Company shall have the right to assign any of its Participating Interest, shares, rights, privileges, duties or obligations under this Contract to an Affiliate.” Such right for assignment is subject to and governed by a set of provisions outlined in the signed contract.

Due to the long duration of the contracts (the Term) that extend beyond 20 years, and due to the usual practice of Merger and Acquisition (M&A) in the international petroleum business it is highly probable that IOCs might “farm in” and “farm out” by acquiring, selling or exchange participation interests in the related petroleum field.

The transfer of participation interests between IOCs involves financial transactions or transfer of “asset” ownership between the concerned parties: the buyer and the seller.  This assignment deal may (though highly likely) results in significant realized gain (profit) for the selling party compared to the actual cost (investment) it made as a consequence to its participation in the related upstream petroleum development project.

 This realized gain is known to be “capital gain” and in most countries it is taxable. The “Capital Gain Tax” is imposed on individuals, companies and corporations and in many countries it is imposed in addition to other direct taxes such as “Property/Wealth Tax” and “Income Tax” among others. The percentage of Capital Gain Tax differs according to the taxation systems and fiscal policies across the world. 

Posted in Ahmed Mousa JiyadComments (3)

Iraq Launches World’s Largest Flare Reduction Project

South Gas Company, Shell and Mitsubishi today officially announced the commencement of operations of Basrah Gas Company, which will be the largest gas project in Iraq’s history and the world’s largest flares reduction project.

Basrah Gas Company is a 25-year incorporated Joint Venture between Iraq’s South Gas Company holding 51% of its shares, Shell 44% and Mitsubishi Corporation 5%. The Joint Venture captures associated gas that is currently being flared from three oil fields in southern Iraq – Rumaila, West Qurna 1 and Zubair.

Iraq has estimated natural gas reserves totaling 112.6 trillion cubic feet, the 10th largest in the world. However, due to decades of wars and sanctions that led to the deterioration of the gas infrastructure, preliminary estimates indicate that Iraq’s losses from gas flaring could amount to billions of dollars annually.

Mr. Ali Khudair, South Gas Company Director General said:

Basrah produces only around 1 billion cubic feet a day of associated gas and some 700 million cubic feet are being flared, which is wasting millions of dollars of the country’s resources every day.

“Partnering with world class companies like Shell and Mitsubishi will help Iraq fulfil its goal of developing its gas infrastructure to eliminate flaring and provide fuel to the Iraqi industry, power generation as well as income to the state.”

Under the agreement signed with the Iraqi Ministry of Oil, BGC will sell processed gas to state-owned South Gas Company. BGC will be dedicated to the rehabilitation and upgrade of the current facilities to put them back to work safely as well as building new assets which is expected to increase the production capacity from a current 400 million cubic feet per day to 2 billion cubic feet per day.

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Basra Gas Project On Track

By John Lee.

The Basra Gas Company (BGC) — a joint venture between the state-run South Gas Company (SGC), Shell and Mitsubishi — is processing around 400 million cubic feet per day (mcfd) of gas, and is on track to treat 2 billion cubic feet per day by 2017.

SGC general director, Ali Khudhier, told Reuters:

Iraq should stop importing LPG in second half of 2014. We are producing now around 2,000 tonnes of LPG and we expect to reach production of 3,000 tonnes in second half of 2014.

“The produced LNG will be exported to east Asia by ships.

The $17-billion project started processing small amounts of raw gas in mid-2012, and is now producing gas suitable for power plants along with liquid petroleum gas (LPG), cutting Iraq’s fuel import requirements.

Providing Iraq’s own modest gas needs are met first, the deal also gives BGC the right to build a liquefied natural gas (LNG) export terminal fed with at least 600 mcfd of gas in a few years time.

(Source: Reuters)

(Picture: Gas flaring at Rumaila)

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Shell Awards WorleyParsons 3-Yr Gas Contract

WorleyParsons has been awarded a three year contract by Shell Gas Iraq BV to provide project management support and services for the rehabilitation of gas facilities and infrastructure that are part of the scope of Basrah Gas Company (BGC).

In November 2011, as part of a push to make better use of its gas resources, Iraq’s government signed a deal with Shell and Mitsubishi to develop the world’s largest flares reduction company, BGC. BGC is expected to commence operations early next year.

It is a 25-year joint venture with state run South Gas Company holding a 51% stake, Shell 44% and Mitsubishi 5%. This joint venture is designed to capture, treat and monetise associated gas currently being flared from three southern oilfields, wasting more than 10 million dollars per day of the country’s natural resources.

WorleyParsons will provide project management, technical and construction supervision personnel to support BGC in the rehabilitation inspection, engineering, procurement and construction (EPC) activities. WorleyParsons will also provide an established Project (Quality) Management System which will help manage and control the project effectively during its execution from the plant inspections through to engineering and design concluding with commissioning.

The contract will be executed from WorleyParsons’ offices in Iraq and the United Arab Emirates, and will involve working in different locations around the world with front end engineering design and EPC contractors. The man-hours to be performed by WorleyParsons over the life of the contract are estimated to exceed 500,000 man-hours.

Commenting, WorleyParsons’ CEO Andrew Wood (pictured) stated:

We are pleased to continue our involvement in the development of Iraq’s gas infrastructure as well as being part of this project that will significantly contribute to the sustainability of the Iraqi economy and environment. We will work closely with the development partners to ensure we create the maximum value over the lifetime of the asset.”

(Source: WorleyParsons)

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