Basrah Gas Company’s (BGC) natural gas liquids (NGL) project is on track to be commissioned this year, according to a statement released by the company.

The project has a value of $170m and its scope includes the construction of an integrated gas plant comprising two units, each with the capacity to process 200 million standard cubic feet a day (cf/d) of gas. 

Earlier this month, the undersecretary for gas affairs Ezzat Saber Ismail said Iraq’s Oil Ministry was working to reduce the flaring of associated gas.

He said speeding up the implementation of associated gas-gathering projects remained a priority for his ministry.

In November last year, BGC said it aimed to ramp up its capacity to gather gas from oil facilities over the next five years, increasing volumes to 1,400 million cf/d.

The increase in capacity was mainly expected to be achieved by completing the planned Basra NGL project.

Reducing flaring

Iraqi oil fields routinely burn off associated natural gas when they produce oil instead of collecting and processing it to be used as a fuel or feedstock for petrochemicals facilities.

This practice, called flaring, causes environmental damage and has negative health implications for nearby communities. Iraq has been the world’s second-biggest gas-flaring country after Russia for years.

In 2021, Iraq flared a total of 17.9 billion cubic metres of natural gas, emitting 47.71 million tonnes of carbon dioxide, according to World Bank data. Some analysts say this underestimates the true extent of the problem.

If the natural gas had been captured and sold instead of flared, it would have made revenues of more than $2bn, according to a Word Bank estimate.

In June 2021, the International Finance Corporation (IFC) announced it had acted as lead arranger for a five-year $360m loan to BGC to help it carry out one of the world’s largest gas-flaring reduction projects.

The IFC is part of the World Bank Group and offers investment, advisory and asset management services to encourage private sector development in less developed countries.

BGC is a public-private joint venture of Iraq’s state-owned South Gas Company, the majority shareholder, UK/Dutch Shell and Japan’s Mitsubishi.

BGC is using the IFC loan to execute a series of projects to gather increasing gas volumes from southern Iraq oil fields.