Iraq Basra Gas (BGC) consortium has signed a $360 million loan agreement with the World Bank's International Finance Corporation (IFC) to help it reduce gas flaring across the south of the country and provide much-needed fuel for power generation, Anadolu has reported.
BGC said that the five-year IFC loan will partially fund the construction of the new Basra Natural Gas Liquid Extraction Plant, which will boost gas processing capacity by 40 per cent to 1.4bn ft³ per day (14.42bn m³ per year) from 1bn ft³ per day.
The expansion will contribute to increasing BGC's capacity to process an additional 400 million standard cubic feet of gas per day from nearby producers, it added.
Established in 2013, the Basra Gas Consortium is a 25-year joint venture between the state-owned South Gas Company, Shell, and Japan's Mitsubishi.
READ: Iraq to invest $3bn in Basra Gas Company
Iraq is the second-largest producer of crude oil in the Organisation of the Petroleum Exporting Countries (OPEC) after Saudi Arabia. It has an average daily production of 4.6 million barrels under normal conditions.
The country also has an estimated stockpile of 132 trillion cubic feet of gas, 700 billion of which has been burnt off due to lack of infrastructure to exploit it, the Iraqi oil ministry has said. Iraq needs gas to operate power plants, and it imports 20 million standard cubic feet per day from Iran, although 70 million standard cubic feet per day of gas is required to operate the plants.