The Iraqi Higher Energy Committee gave the OK to a liquefied natural gas deal with Royal Dutch Shell and Mitsubishi. The deal, which includes $13 billion in investments over the next 25 years, is to upgrade existing infrastructure in the energy-rich south of Iraq, gulfnews.com reports.
A joint venture, dubbed Basra Gas, would capture as much as 700 million cubic feet of natural gas per day that would normally be flared off from oil fields in southern Iraq.
"The execution of the project will start in the first quarter of 2012 and will yield $30 billion in returns to the Iraqi government and save $40 billion for the Iraqi economy by turning from burning oil to the use of natural gas," an Iraqi official familiar with the deal was quoted as saying on condition of anonymity.
Iraq through the deal could become a regional producer of liquefied natural gas. The project could provide enough power to meet the demands of more than 20,000 homes and reduce Iraq's dependence on natural gas imports from neighboring Iran.
Iraq would hold 51 percent in Basra Gas, Shell would control 44 percent and Mitsubishi would take on the rest.