Iraq will next week ink the final contract in a $17-billion deal with Shell and Mitsubishi to capture and process gas from its southern oil fields, an oil ministry official said on Wednesday.
"We will sign the final contract on November 24 with Shell and Mitsubishi, after long and difficult negotiations," Ahmed Shamaa, deputy oil minister in charge of refineries, told a news conference.
"The accord is totally in Iraq's favour both because of the significant amount of gas that can be utilised for electricity and industry, and the revenues that will total $31 billion over the 25-year period," he said.
The cabinet on Tuesday approved the deal for the formation of Basra Gas Company, which will process associated gas from the Rumaila, Zubair and West Qurna-1 fields.
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State-owned South Gas Company will hold 51 percent of Basra Gas, while Shell will have 44 percent and Mitsubishi five percent, government spokesman Ali al-Dabbagh said.
He said the total investment would be "$17 billion for a period of 25 years."
"The capacity of the proposed project will be two billion cubic feet," or 56.6 million cubic metres, per day, Dabbagh said.
Ruba Husari, the editor of the Iraq Oil Forum, estimated Iraq's income at $58 billion over the life of the project, or $31 billion after subsidies on gas that it provides.
"But the most important benefit to Iraq is definitely the currently wasted $1.8 billion year worth of gas that is being burnt daily and flared in the air," Husari said.