A $12bn Iraq gas deal between the local state-owned South Gas, Anglo/Dutch Shell and Japan’s Mitsubishi Corporation has been delayed indefinitely.

Iraq Oil Ministry spokesman, Murtada al-Jashaami, is quoted as saying the deal is on hold, but declined to give a reason for the delay and gave no timeline for a contract to be signed. However, Shell has said that South Gas has initiated the scheme and is waiting for approval from the Iraq government.  

The project aims to harness the 700 million cubic feet-a-day (cf/d) of associated gas currently being flared in southern Iraq. That is enough gas to generate 4.500MW of electricity.

South Gas would be the majority shareholder in the proposed deal, with a 51 per cent stake while Shell would have 44 per cent and Mitsubishi 5 per cent.