The London-based international oil and gas company Shell is on schedule to commission the first train of its natural gas liquids (NGL) plant in Iraq at the end of May, according to industry sources.

The client on the project is Basra Gas Company (BGC), which is a joint venture of Anglo-Dutch major Shell and the Iraqi government.

“Shell is tentatively planning a ceremony to mark the commissioning that is currently scheduled for 29 May,” one source said. “The prime minister and other senior officials are likely to attend.”

The facility is located in the Basra governorate and is expected to have a production capacity of 4,124 million cubic metres a year.

The greenfield gas processing plant has been constructed with two trains, each with capacity to process 2,062 million cubic metres a year.

Initially, the project was expected to be developed by awarding an engineering, procurement and construction (EPC) contract with an estimated budget of $170m.

However, BGC ultimately split the project up so that engineering work was done by the UK contractor Wood.

Procurement was done by Shell, with some modules carried out by Canada’s Exterran.

The site work was awarded to China Petroleum Engineering & Construction Corporation.

The main contracts for the project were awarded in February 2019.

The project suffered significant cost and time overruns related to the Covid-19 pandemic, according to industry sources.

“Because Shell did not use an EPC contract, all of the extra costs had to be covered by Shell itself,” said one source.

The scope of the project included:

• Construction of a condensate stripping plant
• Construction of a sulfur recovery unit
• Construction of a breakwater facility
• Construction of a jetty
• Construction of a desulphurisation unit
• Construction of dehydration and liquefaction units
• Construction of a mercury removal unit
• Construction of export terminal facilities
• Installation of a light hydrocarbons recovery unit and treatment columns
• Installation of a tail gas treatment unit
• Laying of pipelines
• Construction of associated facilities

The Basra NGL plant is designed to process by-product gas that would otherwise be flared from Iraq's Rumaila, Zubair and West Qurna-1 oil fields.

The gas processed at the plant will be delivered to domestic power plants to be used for electricity generation.

It is expected that when the project is fully operational and connected to the country's gas grid, the gas it produces will potentially generate more than 1,500 megawatts of electricity – enough to power more than 1 million houses in Iraq.