Basra Gas Company starts operations and plans major tenders

04 April 2013

Five major rehabilitation projects planned for 2013

Iraq’s flared gas utilisation project has finally been incorporated as Basra Gas Company (BGC) as a joint venture of state-owned South Gas Company, UK-Dutch Shell Group and Japan’s Mitsubishi. The firm is now beginning to move ahead with design work and contract awards.

Almost four years after an initial agreement was signed, BGC will begin formal operations this month. It is already processing around 400 million cubic feet a day (cf/d) of gas and has already invited a number of international engineering, procurement and construction (EPC) firms to implement five new inspection and rehabilitation projects to bring the operating rates of its current infrastructure back up to their design levels. To meet this target, however, BGC will have to push on with a number of major new projects at the same time.

The company has already signed a contract with Italy’s Saipem for the rehabilitation of the loading dock, service dock and loading arms of the Umm Qasr port in the Gulf to prepare it for exports. The scheme is expected to take three years. No details regarding the value of the contract have been announced.

There are another four deals still under negotiation, with contracts expected to be signed and work beginning by the end of the year. Japan’s Toyo is in discussions to rehabilitate three concrete reservoirs and cooling banks at the Umm Qasr storage facility. The US’s GE will rehabilitate gas compression stations at North and South Rumaila.

The last two deals cover the rehabilitation of natural gas liquids (NGL) plants, with Japan’s Chiyoda working on the North Rumaila plant and France’s Technip working on Khor al-Zubair. These will allow Iraq to process up to 2,000 million cubic feet a day (cf/d) of associated gas to produce NGLs and liquefied petroleum gas (LPG).

But in addition to the rehabilitation work, the estimated $17bn megaproject will also require the construction of new facilities if BGC is to reach its target of producing 2,000 million cf/d of gas by 2017. At this rate, Iraq will no longer need to import liquid petroleum gas (LPG) by the middle of 2014. It currently consumes around 2,000 tonnes a day (t/d), meaning there could be significant volumes available for export.

This is where the major of work must be done.  

BGC is currently selecting the sites and working on basic designs for two NGL plants to absorb approximately 1,000 million cf/d of associated gas produced from the West Qurna and Rumaila oil fields. In tandem, the new LPG plants will absorb this production, producing 9,570 tonnes a day (t/d). Commissioning is expected to start in 2017.

Also in BGC’s plans is the construction of Iraq’s first gas liquefaction plant with a capacity of 3 to 4 million tonnes a year from 600 million cf/d of dry gas. This could even be expanded after meeting the needs of Iraq’s NGL separating units and other downstream plants and industries.

BGC is currently in the process of selecting a site for the LNG facility, which is scheduled for commissioning in 2019. It has two options, either an onshore plant, near the Al-Faw port or a permanently moored floating terminal in the Gulf. 

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