By John Lee.

A Chinese company has reportedly won a contract to build a natural gas liquids (NGL) plant in Basra.

According to Xinhua, China’s Petroleum Engineering and Construction Corporation (CPECC) signed the contract on Wednesday with Iraq’s Basra Gas Company (BGC).

As a result of the new plant, BGC will increase its gas production capacity by 40 percent.

The Basra NGL facility will be built in Ar-Ratawi area in west of Basra and is scheduled to complete at the end of 2020.

CPECC is a subsidiary of the China National Petroleum Corporation (CNPC),

(Source: Xinhua)

By John Lee.

Shell has reportedly announced that the Basrah Gas Company (BGC) has taken a “final investment decision (FID)” on its growth programme, which will increase BGC’s capacity by 40 percent.

According to Oil and Gas Middle East, the decision was taken with the support of all BGC’s shareholders: South Gas Company (SOC), Shell and Mitsubishi.

BGC captures flared gas from the Rumaila, West Qurna 1 and Zubair oilfields, converting it into dry gas for power generation and liquids for the domestic market and for exports.

At the heart of the new development is the Basrah Natural Gas Liquids (Basrah NGL) project; a 400 million standard cubic feet per day greenfield gas processing plant at Ar Ratawi.

More here.

(Source: Oil and Gas Middle East)

By John Lee.

The Basra Gas Company (BGC) is expected to increase production from its current level of 900 million cubic feet per day (mcf/d) to 1,050 mcf/d by the end of this year.

A statement from the Ministry of Oil on Thursday added that the project aims to reach a target of 2,000 mcf/d from the fields of Rumaila, Zubair and West Qurna 1.

Shell has a 44-percent stake in the $17-billion, 25-year BGC project, with Iraq having 51 percent, and Japan’s Mitsubishi 5 percent.

(Source: Ministry of Oil)

By John Lee.

Having sold its stake in the West Qurna 1 project to Japan’s Itochu, Shell is now said to be “fully committed” to the giant Basra Gas Company (BGC), which captures gas from Iraq’s southern oilfields.

Frits Klap, managing director of BGC, told Reuters that processing capacity has more than tripled to 938 million standard cubic feet (scf) per day since operations started in 2013, and further expansion is planned:

“We are going to go for something called BNGL, or Basra NGL (natural gas liquids) expansion, which really is going to take us from 1 bcf to 1.4 bcf through two trains, each of 200 million scf per day.”

Shell has a 44-percent stake in the $17-billion, 25-year project, with Iraq having 51 percent, and Japan’s Mitsubishi 5 percent.

More here.

(Source: Reuters)

By John Lee.

Malaysia-based Wah Seong Corporation Berhad (WSC) has announced that its indirect wholly-owned subsidiary Wasco Engineering International Ltd (WEIL) has been awarded a contract by Basrah Gas Company (BGC) for the design, packaging and sale of gas compressor packages and associated plant and site facilities.

The contract is valued at $34.6 million.

The scope of work of the contract involves provision of gas compressors and process equipment such as tri-ethylene glycol (TEG) unit, fuel gas conditioning skid, pipe racks, slug catcher, knock out drum, vent stack, site facilities such as office and workshop containers, lighting, safety equipment, fire and gas detectors, power generators and air compressors.

The activities undertaken will include engineering, detail design, procurement and packaging of the above process equipment. The activity is expected to commence in March 2018, and to be completed by end of 2018.

The contract is for the provision of engineering, design, supply and fabrication services which are within the business scope of the Engineering Division of the WSC Group and the risks are the normal operational risks associated with the said business. The WSC Group has previously supplied similar packages to the same customer in Iraq.

The contract is expected to contribute positively to the earnings of WSC Group over the contract period. The contract is project specific and is not renewable.

(Source: WSC)

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] has announced an agreement with an American company to invest in the flare gas associated with the Nahr Bin Umar oil field in Basra governorate.

The Ministry names the company as “Oren”, but Iraq Oil Report identifies it as the Houston-based Orion Gas Processors.

A memorandum of understanding is expected to be signed between the company and the Basrah Gas Company (BGC) in the coming days.

Orion says its “innovative patented and patent-pending technologies extract hydrocarbons from underutilized gas streams, creating stable liquids that may be blended into the oil stream. High extraction yields combined with knowledge-based blending creates superior economics for oil producers over competing technologies.

According to the Ministry, the field produces about 40,000 barrels of crude oil per day (bpd), and 25 MSCF of gas per day.

(Source: Oil Ministry, Iraq Oil Report)

By John Lee.

Oil giant Shell is trying to sell its stake in the Majnoon oilfield (pictured) in southern Iraq, following a failure to reach agreement with Iraq’s Ministry of Oil.

A Shell spokesman told UAE-based newspaper The National:

“Following extensive discussions with the Ministry of Oil, the oil minister of Iraq formally endorsed a recent Shell proposal to pursue an amicable and mutually acceptable release of the Shell interest in Majnoon, with the timeline to be agreed in due course.”

Reuters quotes an oil official as confirming that the Ministry failed to reach an agreement with Shell over its Majnoon operations, including production plans and investments budgets. “We think it’s for the interest of all parties that Shell should withdraw,” he added.

A Shell spokesman told Reuters:

“In May 2017, the ministry of oil in Iraq applied the performance penalty and remuneration factor on the Shell operated venture, the Majnoon oil field, which had a significant impact on its commerciality.”

The company holds a 45-percent share in the project, with Malaysia’s Petronas holding 30 percent, and the Iraqi state-owned Maysan Oil Company having 25 percent.

Output from the field, which commenced production in 2014, is currently estimated at around 235,000 barrels per day (bpd), with a 400,000 bpd target by 2020.

Shell is also seeking to selling its stake in the ExxonMobil-operated West Qurna 1 oil field.

In addition to its oil interests in Iraq, Shell is a key player in the Basra Gas Company (BGC), a joint venture between the Iraq’s South Gas Company (SGC) (51%), Shell (44%) and Japan’s Mitsubishi (5%), which processes gas from the Rumaila, West Qurna and Zubair fields, which would otherwise be flared.

The National also quotes a Shell spokesman as saying that the company remains committed to this, and to its petrochemical project in Iraq:

“By leaving Majnoon, Shell will be in a stronger position to focus its efforts on the development and growth of the Basrah Gas Company and the Nebras Petrochemicals Project.

(Sources: Reuters, The National)

By John Lee.

Chinese engineering company Norinco International has reportedly signed a contract with Jabal Bazian Co for General Trading [Jabal Jaber Bazian Company for General Trading] for the construction of a new cement plant in Iraq.

The $445-million contract covers the plant’s production line design, purchasing, construction management, operational work as well as  administration buildings, dormitories and other facilities, and is to be completed within 28 months.

According to Yicai Global, the local company is based in Iraqi Kurdistan and is owned by Taher Mustafa Ahmed.

Norinco has previous experience in Iraq, having built an oil tank project for the State Company for Oil Projects (SCOP), to be used by the South Gas Company (SGC), as part of the UN oil-for-food program.

(Sources: Yicai Global, Global Times, Norinco)

Oil-producing countries yet to address their gas flaring may begin to feel there are no more excuses.

In a remarkable and bold decision, the government of Iraq recently endorsed the “Zero Routine Flaring by 2030” Initiative, (ZRF), which means the country has committed to not routinely flare associated gas in any new oil fields and will work to end routine flaring in existing oil fields as soon as possible and no later than 2030.

Launched in 2015 by UN Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim, the ZRF Initiative is designed to end a 150-year-old oil industry practice that is responsible for emitting more than 300 million tons of CO2 into the atmosphere.

Gas flaring also wastes a valuable source of energy that could be put to productive use, particularly in countries where many people lack access to electricity.

Even in the most difficult circumstances we recognize that Iraq must ensure its resources are managed sustainably for future generations. Flaring is not only bad for the environment, it represents several billion dinars going up in smoke.
— Dr. Hamed Younis Saleh, Deputy Minister of Oil for Gas Affairs

The latest satellite data released by the US National Oceanic & Atmospheric Administration and the World Bank-led Global Gas Flaring Reduction Partnership (GGFR) shows that Iraq’s gas flaring has increased dramatically. Just four years ago the country was flaring about 12 bcm of gas annually. However, in 2015 the country flared close to 16 bcm, making it the second-largest gas flaring country in the world.

Oil-producing countries yet to address their gas flaring may begin to feel there are no more excuses.

In a remarkable and bold decision, the government of Iraq recently endorsed the “Zero Routine Flaring by 2030” Initiative, (ZRF), which means the country has committed to not routinely flare associated gas in any new oil fields and will work to end routine flaring in existing oil fields as soon as possible and no later than 2030.

Launched in 2015 by UN Secretary-General Ban Ki-moon and World Bank President Jim Yong Kim, the ZRF Initiative is designed to end a 150-year-old oil industry practice that is responsible for emitting more than 300 million tons of CO2 into the atmosphere.

Gas flaring also wastes a valuable source of energy that could be put to productive use, particularly in countries where many people lack access to electricity.

Even in the most difficult circumstances we recognize that Iraq must ensure its resources are managed sustainably for future generations. Flaring is not only bad for the environment, it represents several billion dinars going up in smoke.
— Dr. Hamed Younis Saleh, Deputy Minister of Oil for Gas Affairs

The latest satellite data released by the US National Oceanic & Atmospheric Administration and the World Bank-led Global Gas Flaring Reduction Partnership (GGFR) shows that Iraq’s gas flaring has increased dramatically. Just four years ago the country was flaring about 12 bcm of gas annually. However, in 2015 the country flared close to 16 bcm, making it the second-largest gas flaring country in the world.