Royal Dutch Shell has received final approval to gather raw gas from three major Iraqi oil fields.
The firm said the Iraqi cabinet had allowed it to form a joint venture (JV) with Mitsubishi Corporation and the country’s South Gas Company to collect gas which is currently flared because there is no infrastructure in place to process it.
Gas from the Rumaila, Zubair and West Qurna 1 and Majnoon fields in the southern part of the country will be collected by the JV. Around 123,000 barrels of oil equivalent are burned off in the region every day, which at current prices amounts to £1.1billion of gas every year.
Shell said it would hold a 44% stake in the JV, which will be called Basrah Gas Company. South Gas will have a 51% share, while Mitsubishi will hold the remaining 5%.
Shell chief executive Peter Voser said: “Capturing this gas will create a reliable supply of energy for Iraq while at the same time reducing greenhouse gas emissions.
“This also sends a positive signal about the investment climate in the country.”