BAGHDAD, (AP) – Iraq has approved a multibillion-dollar joint venture deal with Royal Dutch Shell PLC to tap associated natural gas in the south of the country.
According to the deal, designed to exploit the gas in three oil fields close to the southern city of Basra, Iraq will hold 51 percent of the venture’s shares, Shell 44 percent and Japan’s Mitsubishi Corp. 5 percent.
A government statement on Tuesday confirmed the deal but did not give the date for its final signing.
Iraq sits on an estimated 112 trillion cubic feet of natural gas reserves. It only produces about 1.5 billion cubic feet a day due to poor infrastructure.
Associated natural gas is a byproduct of crude production. Iraq’s daily flare of associated gas is about 700 million cubic feet.