The UK/Dutch Shell Chemicals signed a deal with the Iraq Oil Ministry to carry out a feasibility study for a petrochemicals plant in the Gulf state.

An Oil Ministry spokesman said that the deal is designed to utilise the gas feedstock that will become available as part of Shell’s $17bn deal to capture the gas currently flared from Iraq’s southern oil fields.

The feasibility study will look at various issues including product mix, capacity, location, as well as formulating a potential budget.

Other uses for the gas include power plants, as well as other heavy industrial uses such as steel production.