The Iraq government is close to granting approval for a proposed deal with the Anglo-Dutch Shell to form the Basra Gas Company.

The deal involves a 25-year venture that will capture the gas that is currently flared in the south of Iraq and use it for domestic use as well as export.

Shareholders in the scheme include the Iraq government, which will retain 51 per cent stake, Shell with 44 per cent share and Japan’s Mitsubishi which hold the remaining 5 per cent.  

As part of the deal, $12.8bn will be spent on infrastructure and $4.4bn on a liquefied natural gas (LNG) plant.