Shell says fully committed to Iraq gas venture

Royal Dutch Shell is fully committed to its gas joint venture in Iraq, after the energy major exited its oil assets in the Opec country, and plans to boost its gas output there to 1.4 billion cubic feet (bcf) a day by 2020, a senior executive said. Iraq's gas development plans have long focused on Basra Gas Co (BGC), a $17 billion, 25-year project in which Iraq has 51 percent, Shell 44 percent and Japan's Mitsubishi Corp 5 percent.
The project was designed to aggregate gas from fields in the south including West Qurna 1, operated by Exxon Mobil Corp ; Zubair, operated by Italy's Eni; and Rumaila, developed by BP. Frits Klap, managing director of BGC, told Reuters that gas output from the JV, the main producer of the fuel in southern Iraq, was currently at 938 million standard cubic feet (scf) per day with further expansion planned.
"Since 2013 (when operations commenced), we have more than tripled the processing capacity," Klap said in a telephone interview from Basra. "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," he said.
He said he expected those trains to be up and running by the end of 2020. The number of trains could be raised to five, he said, with a final investment decision due around the year-end. "So that's about a 40 percent expansion, and that would be massive," he said. Iraq plans to stop flaring by 2021. Gas flaring costs nearly $2.5 billion in lost revenue for the government and would be sufficient to meet most needs for gas?based power generation, according to the World Bank.
Shell had said it would focus its efforts on the development and growth of BGC after handing over operations at the Majnoon field to the Iraqi government. Shell also sold its stake in West Qurna 1 to Japan's Itochu Corp Klap said Shell was committed to BGC. "Shell will just be in a stronger position to focus its efforts on the development and growth of BGC and of course potentially the Nebras petrochemicals project," he said. "Shell remains fully committed to Iraq through BGC."