Iraq's Shell-led Basrah Gas (BGC) consortium will receive a $360m loan from the World Bank's International Finance Corporation (IFC) to help it reduce gas flaring across the south of the country and provide much-needed fuel for power generation.
BCG said that the five-year loan will partially fund construction of a new gas-processing plant, Basrah Natural Gas Liquid Extraction Plant (BNGL), which will boost gas processing capacity by 40pc to 1.4bn ft³/d (14.42bn m³/yr) from 1bn ft³/d.
The Iraqi government in May approved investment of $3bn over the next five years to boost gas capture and processing over two phases, to eventually reach 2.4bn ft³/d.
BGC, which includes state-owned South Gas, Shell and Japan's Mitsubishi, has gathered, treated and processed associated gas produced at the Rumaila, West Qurna 1 and Zubair crude fields. It captures around 60pc of the available gas, which is used to produce around 3.4GW of electricity. It also provides around 80pc of Iraq's LPG.
Higher gas output from BGC, and other planned gas-capture schemes, would help Iraq cut its reliance on imported gas and electricity from Iran.
"We hope that it will send a strong signal to other investors and help drive more private investments to tackle climate change and support inclusive growth in Iraq," said IFC vice president for the Middle East and Africa Sergio Pimenta.
Baghdad has been trying to position Iraq as a country ripe for energy transition investment, with ambitious targets for solar and renewables to make up 20-30pc of its energy mix by 2027. Abu Dhabi's state-owned Masdar last week signed an agreement to develop a range of solar power projects across the centre and south of Iraq, producing up to 2GW of electricity. Iraq also secured a $3bn investment from Saudi Arabia at the end of March.
