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Tuesday, 7 June 2011
Iraq Oil Min: Meeting With Shell Next Week On Natural Gas Project
Vienna, Officials from Iraq and Royal Dutch Shell PLC (RDSB) are set to meet next week as the two sides come closer to finalizing a $12 billion natural gas venture.
"We are going to meet with Shell in Istanbul next week," Iraqi oil minister Abdul Kareem Luaiby said here ahead of Wednesday's meeting of the Organization of Petroleum Exporting Countries.
"We will discuss with them the final draft contract," Luaiby added.
The joint venture would aim to capture and market millions of cubic feet a day of gas that's now flared as a byproduct of giant oilfields near Basra.
The price of the natural gas, which will be sold to the Iraqi government, remains the major sticking point.
The gas project is crucial to Baghdad's ambitious oil expansion that will also boost much-needed power generation in Iraq. But price negotiations in such situations can be difficult, as Iraq balances its desire for cheap gas against the project's potential profitability.
The joint venture--Basrah Gas Co, or BGC--will process associated gas produced from three supergiant Iraqi fields--Rumaila, West Qurna 1 and Zubair--all located in Basra. The three fields are being developed by international oil companies.
In total, the three fields are currently producing some 1.05 billion cubic feet a day of natural gas, but only 450 million cubic feet a day are utilized while the rest is flared.
The project is vital to Shell's strategy of positioning itself as a leading gas supplier and producer in the Middle East. After domestic needs are met, an LNG terminal will be built in the Gulf to handle the export of 600 million cubic feet a day.
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Iraq Oil Min: Meeting With Shell Next Week On Natural Gas Project
Vienna, Officials from Iraq and Royal Dutch Shell PLC (RDSB) are set to meet next week as the two sides come closer to finalizing a $12 billion natural gas venture.
"We are going to meet with Shell in Istanbul next week," Iraqi oil minister Abdul Kareem Luaiby said here ahead of Wednesday's meeting of the Organization of Petroleum Exporting Countries.
"We will discuss with them the final draft contract," Luaiby added.
The joint venture would aim to capture and market millions of cubic feet a day of gas that's now flared as a byproduct of giant oilfields near Basra.
The price of the natural gas, which will be sold to the Iraqi government, remains the major sticking point.
The gas project is crucial to Baghdad's ambitious oil expansion that will also boost much-needed power generation in Iraq. But price negotiations in such situations can be difficult, as Iraq balances its desire for cheap gas against the project's potential profitability.
The joint venture--Basrah Gas Co, or BGC--will process associated gas produced from three supergiant Iraqi fields--Rumaila, West Qurna 1 and Zubair--all located in Basra. The three fields are being developed by international oil companies.
In total, the three fields are currently producing some 1.05 billion cubic feet a day of natural gas, but only 450 million cubic feet a day are utilized while the rest is flared.
The project is vital to Shell's strategy of positioning itself as a leading gas supplier and producer in the Middle East. After domestic needs are met, an LNG terminal will be built in the Gulf to handle the export of 600 million cubic feet a day.
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