Page 15 - MEOG Annual Review 2021

MEOG JUNE MEOG

build a facility to process associated gas from the would come in two stages, with each adding 300
southern oilfields of West Qurna-2, Majnoon, mmcf (8.5 mcm) per day.
Ratawi, Tuba and Luhais, as well as working to
increase oil production from Ratawi from 60,000 Nebras
barrels per day to 200,000 bpd. Akkas, Ratawi and the SGUP will provide the
Meanwhile, Allawi, who is also deputy PM, feedstock for the long-awaited Nebras project,
said in August that Baghdad would focus on for which Shell signed a memorandum of under-
“getting the major Saudi stakeholders like Ara- standing (MoU) with the Iraqi government in
mco and ACWA to be involved in the gas gath- 2012. This gives the IOC a 49% stake, with Iraq’s
ering” at Ratawi. MoO and the Ministry of Industry holding a
He added: “The reason why the Saudis are combined 51%.
interested in this is because you can actually SABIC has been considering an investment
ring-fence it so that you do not have to deal with in the project since late 2017, with Iraq saying a
the red tape and bureaucracy that bedevils for- few months later that talks were at an advanced
eign investors.” stage between the government, Shell and the
Just as Schlumberger appears set to take the Saudi firm.
lead on Akkas, any Saudi involvement at Ratawi This follows the announcement of plans by
would see a hook-up with fellow US services firm SABIC to re-open an office in Iraq as part of a
Honeywell, which last year agreed to advance the wider intergovernmental rapprochement.
development of the gas project. There have been ups and downs for the pro-
Ratawi is already key to the South Gas Utilisa- ject and various sources have told Middle East
tion Project (SGUP) on which a final investment Oil & Gas (MEOG) that Shell’s concern about
decision (FID) was taken by super-major Royal exposure to endemic corruption has been one of
Dutch Shell in January last year. the key stumbling blocks.
The $17.5bn development is being executed The design plans for Nebras entail a project
by the Basra Gas Co. (BGC) JV of state-owned that could produce at least 1.8mn tonnes per
Basrah Oil Co. (BOC), Shell and Japan’s Mitsubi- year (tpy) of polyethylene and various other
shi. It will treat, process and distribute associated petrochemicals.
gas from the giant Rumaila, West Qurna 1 and In January 2015, Shell released a statement
Zubair oilfields. that Iraq’s cabinet had authorised the Nebras
The latest stage comprises Basrah NGL, cov- project and that the company would work
ering the installation of the two-train gas-pro- “jointly with the ministries of oil and transport
cessing plant at Ratawi in the west of Basra to to develop a joint investment model for a world-
process an additional 4.1 bcm per year of gas. scale petrochemical cracker and derivative com-
According to the statement on the FID, the plex in the south of Iraq”.
scheme would entail an increase in the produc- Costs for the project have been quoted at
tion of higher-margin LPG for export, as well as $11bn, and while it remains in the pre-front-
providing feedstock for domestic power plants. end engineering and design (pre-FEED) phase,
In early 2019 BGC signed a contract with China Abdul Jabbar said in August that Baghdad
Petroleum Engineering & Construction Corp. intended to speed up the pace of development.
(CPECC) to carry out the work, scheduled for The minister had said that that contractual and
completion in late 2020. legal terms should be ironed out by the end of
Once the NGL plant is operational and last year, but no further announcements have
hooked up to the Iraqi gas network, it will feed been made.
power stations to generate 1.5 MW or more of Riyadh’s interest in these projects is certainly
electricity, according to BGC managing director cheering for Iraq given the clout of Aramco,
Frits Klap. He added: “The new plant will have SABIC and ACWA, while the alignment of
two trains that will require around 70 MW of US and Saudi interests is illustrative of the dis-
electricity to run efficiently.” pleasure about the continued status quo of Iraq
Honeywell signed a deal in mid-2019 along- importing Iranian gas.
side Bechtel to increase the utilisation of associ- Moves made by the Iraqi government to
ated gas from five oilfields in Basra Governorate. clamp down on corruption by MPs are also
The two companies agreed to collaborate on likely to be an important factor in the realisation
reducing gas flaring from the oilfields by up to of not just these projects, but developments that
20%. At the time, the Ministry of Oil (MoO) said are vital to the future growth of the country’s oil
that an additional 600 mmcf (17mcm) per day and gas sector.™

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