Royal Dutch Shell Plc: Iraq Natural Gas Joint Venture Gets Final Approval
THE HAGUE, The Netherlands, November 15, 2011/PRNewswire-FirstCall/ --
The Iraqi cabinet today approved an agreement with Royal Dutch Shell ("Shell")
(NYSE: RDS.A) (NYSE: RDS.B) and Mitsubishi Corporation, forming a joint venture
to gather raw gas from three major oil fields, adding an important domestic
energy source for Iraq and offering the potential for gas exports.
The joint venture, held 51% by Iraq's South Gas Company, 44% by Shell and 5% by
Mitsubishi Corporation., will be called Basrah Gas Company (BGC) and will gather
raw gas that is currently flared because of a lack of infrastructure to collect
it.
Shell will provide project management and technical expertise with the intention
to facilitate the learning and development of Iraqi staff to progressively
assume key positions in the management of the company. "Capturing this gas will
create a reliable supply of energy for Iraq while at the same time reducing
greenhouse-gas emissions," said Shell Chief Executive Officer Peter Voser. "This
also sends a positive signal about the investment climate in the country."
The joint venture will collect and process raw gas from the Rumaila, Zubair and
West Qurna 1 and Majnoon fields in the southern part of the country. The primary
market for the gas will be Iraq, but any surplus can potentially be exported.
Some 700 million standard cubic feet of gas is currently burned off each day in
southern Iraq. At current prices, the gas is worth about $1.8 billion per year.
Burning it creates as much greenhouse gases each year as 3.5 million cars.
In September 2008, Shell signed a preliminary agreement with the Iraqi Ministry
of Oil for a gas gathering project. The agreement established the commercial
principles to establish a joint venture between Shell and the South Gas Company.
An official signing ceremony will be scheduled in the near future.
In Iraq Shell is the operator of a consortium providing technical assistance in
the development of the Majnoon field.


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Source: Royal Dutch Shell plc