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An international loan of $360 million to reduce the burning of Basra gas
- Time: 06/29/2021 12:33:25
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{Economic: Al Furat News} The Basra Gas Company (BGC) and the International Finance Corporation (IFC) signed today, Tuesday, a loan agreement worth $ 360 million for a period of five years, in line with the vision of the Government of Iraq to maximize the utilization of its natural gas resources to supply Iraqi homes and companies with energy. .
The useful summary.. In important news, you can find it on Al-Furat News Channel on Telegram.. [You must be registered and logged in to see this link.]
The Ministry of Oil said in a statement received by {Euphrates News} a copy of it, "Through this agreement, the International Finance Corporation is investing in the Basra Gas Company to support one of the largest gas flaring reduction projects in the world to support the most sustainable energy sector in Iraq. Basra Gas Company is a project An Iraqi natural gas joint venture established to collect and process associated gas, which is a by-product of the region's oil production process and which would otherwise be flared.
This loan will contribute to the expansion and increase the capacity of Basrah Gas Company to process an additional 400 million standard cubic feet per day of natural gas. This is a 40% increase from the company's current capacity, which aims to help the country meet its growing energy needs and power an additional 1 million Iraqi homes. The Basra liquid-gas separation plant project will reduce greenhouse gas emissions by about 10 million tons annually.
Iraq enjoys large reserves of natural gas, and in the absence of the infrastructure necessary to process gas during oil production, it is burned and wasted. This leads to significant emissions of greenhouse gases, at the same time homes and businesses in the country depend on other energy sources that may themselves be associated with similar emissions of gases. By capturing the gas byproduct and later using it by these customers, the Basrah Liquids Gas Separation Plant project can help reduce overall emissions. The IFC loan will partially finance the construction of this new gas processing facility (Basra Natural Gas Processing Plant (BNGL), which is part of a broader plan to reduce gas flaring in southern Iraq.
On this occasion, Minister of Oil, Mr. Ihsan Abdul-Jabbar Ismail, said: “Signing this loan supports joint efforts to maximize the optimal investment of gas associated with oil operations, by treating it with the latest modern technologies and striving to achieve our goals of converting burned energy into clean and useful energy, and working to reduce emissions. and harmful environmental effects, and the Minister of Oil pointed to the importance of strengthening cooperation with sober international banks to implement and support sustainable development projects, including gas investment projects in the Basra Gas Company.Ismail added that this loan opens new horizons for more cooperation and transactions that serve common interests and goals, stressing that Iraq's commitment to maximizing associated gas investment projects, and achieving the standards and objectives stipulated in the Paris Agreement.
For his part, Malcolm Mays, Managing Director of Basra Gas Company, said: “We are pleased to sign this agreement with the International Finance Corporation, which is the first loan agreement of its kind in the oil and gas sector, and it is a milestone of which we are proud. This agreement demonstrates the strength of Iraqi companies, such as Basrah Gas Company and its ability to attract financing and trust from international banks.The aim of this five-year loan is to support the company's growth project, the Basra Gas-Liqued Processing and Separation Plant (BNGL) project and converting wasted flare gas into much-needed energy for the country.Our strategy is in line with the government's vision "This agreement would not have been possible without the continued support of the Ministry of Oil, the International Finance Corporation and our shareholders."
In a related development, Sergio Pimenta, IFC Vice President for the Middle East and Africa, said: “This pilot project has the potential to deliver significant environmental and economic benefits, including reduced greenhouse gas emissions and increased financial revenues, as well as improving access to energy and lowering costs at Iraqi citizens.This project comes after years of hard work and strong cooperation by all parties involved. We hope to send a strong signal to other investors to support more investments in tackling climate change and supporting inclusive growth in Iraq.”
The IFC investment consists of $137.76 million as a loan from the IFC's own account, and a $180 million syndicated loan to eight international banks (Bank of China, Citibank, Deutsche Bank AG, Industrial Commercial Bank of China, Natixis, Sumitomo Mitsui Banking and Societe General, Standard Chartered Bank), and a $42.24 million loan through the IFC Syndication Managed Lending Portfolio Program, a platform that allows institutional investors to participate in the IFC loan portfolio.
The project benefits from the World Bank Group's long-term engagement in the energy sector in Iraq. Iraq joined the Global Gas Flaring Reduction Initiative in 2011 and in 2013 committed to eliminating all routine natural gas flaring by 2030.
Hamza Abdel-Baqi, General Manager of South Gas Company, said: "A historic achievement achieved by Basra Gas Company by signing the contract with the International Finance Corporation (IFC), according to which the company will receive an amount of $360 million, which will achieve financial stability for the company and enable it to move forward with its five-year plan. In progress towards international competition, as well as supporting local projects and supplementing the national electricity network. We at the South Gas Company, in cooperation with partners from Shell and Mitsubishi, and with the support of the Ministry of Oil, are working to achieve the government’s vision to maximize investment in associated gas and transform it into energy that benefits the Iraqi people.”
Ali Al-Janabi, Vice President of Shell in Iraq said: “We are proud to be partners in the Basra Gas Company joint venture, which is the cornerstone of Iraq’s gas utilization strategy, as we produce gas that feeds 75% of Basra’s electricity demand and Gas LPG to meet more than 65% of the country’s total demand.Besides providing gas for power and industry, BGC plays a vital role in the local economy through recruitment and contracting activities as well as the collection of otherwise flared gas thus significantly improving air quality for the local communities in Basra As an Iraqi, I am particularly proud of this partnership and its positive impact.”
Kunihiko Sakaki, Regional President (Middle East), Mitsubishi, said: “As a joint venture partner of Basra Gas Company (BGC), we are pleased to agree on this agreement with IFC. Not only does BGC contribute to reducing greenhouse gas emissions By processing gas that burns, but also contributed to Iraq’s energy supply by providing feed gas to power plants, and creating jobs through business expansion.This loan will enable Basrah Gas Company to accelerate the Growth Project (BNGL), leading to Increasing the contribution to the collection and processing of gas, stable energy supply and job creation. Once again, we are proud to be a partner in the Basrah Gas Company joint venture and at the same time we are pleased to contribute to supporting Iraq through this project.”
It is noteworthy that the Basra Gas Company is a 25-year joint venture between the Iraqi South Gas Company, which owns 51% shares, and Shell Company, which owns 44% of the shares, in addition to Mitsubishi, which has shares of 5%.
The production rates of the Basra Gas Company reach about 900 million standard cubic feet per day, and this amount of gas is sufficient to produce 3.4 kilowatts of electric power that is sufficient to equip millions of homes and factories in Iraq. The company is currently collecting more than 60% of the gas emitted from three oil fields from the first licensing round: the Rumaila field, West Qurna 1 field, as well as the Zubair field. The Basrah Gas Company is the main center for gas collection and processing in southern Iraq, making it the main Iraqi company for the processing of associated gas and the main source of hydrocarbons used for power generation. The Basra Gas Company provides about 80% of the local market's need of liquefied gas (cooking gas), in addition to the continuous development of its export capabilities, supporting Iraq by diversifying sources of financing and transforming it into a country completely exporting liquefied petroleum gas (cooking gas).
Since the launch of its activities in 2013 until the end of 2020, the Basra Gas Company played an important role in reducing the quantities of carbon dioxide emissions resulting from burning associated gas, as the company was able to prevent approximately 110 million tons of carbon dioxide emissions from entering the atmosphere, and this is what The CO2 emission is equivalent to 3.5 from coal power plants during the same period, or the equivalent of removing 2.9 million cars from the road for the same period (2013 to the end of 2020).
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{Economic: Al Furat News} The Basra Gas Company (BGC) and the International Finance Corporation (IFC) signed today, Tuesday, a loan agreement worth $ 360 million for a period of five years, in line with the vision of the Government of Iraq to maximize the utilization of its natural gas resources to supply Iraqi homes and companies with energy. .
The useful summary.. In important news, you can find it on Al-Furat News Channel on Telegram.. [You must be registered and logged in to see this link.]
The Ministry of Oil said in a statement received by {Euphrates News} a copy of it, "Through this agreement, the International Finance Corporation is investing in the Basra Gas Company to support one of the largest gas flaring reduction projects in the world to support the most sustainable energy sector in Iraq. Basra Gas Company is a project An Iraqi natural gas joint venture established to collect and process associated gas, which is a by-product of the region's oil production process and which would otherwise be flared.
This loan will contribute to the expansion and increase the capacity of Basrah Gas Company to process an additional 400 million standard cubic feet per day of natural gas. This is a 40% increase from the company's current capacity, which aims to help the country meet its growing energy needs and power an additional 1 million Iraqi homes. The Basra liquid-gas separation plant project will reduce greenhouse gas emissions by about 10 million tons annually.
Iraq enjoys large reserves of natural gas, and in the absence of the infrastructure necessary to process gas during oil production, it is burned and wasted. This leads to significant emissions of greenhouse gases, at the same time homes and businesses in the country depend on other energy sources that may themselves be associated with similar emissions of gases. By capturing the gas byproduct and later using it by these customers, the Basrah Liquids Gas Separation Plant project can help reduce overall emissions. The IFC loan will partially finance the construction of this new gas processing facility (Basra Natural Gas Processing Plant (BNGL), which is part of a broader plan to reduce gas flaring in southern Iraq.
On this occasion, Minister of Oil, Mr. Ihsan Abdul-Jabbar Ismail, said: “Signing this loan supports joint efforts to maximize the optimal investment of gas associated with oil operations, by treating it with the latest modern technologies and striving to achieve our goals of converting burned energy into clean and useful energy, and working to reduce emissions. and harmful environmental effects, and the Minister of Oil pointed to the importance of strengthening cooperation with sober international banks to implement and support sustainable development projects, including gas investment projects in the Basra Gas Company.Ismail added that this loan opens new horizons for more cooperation and transactions that serve common interests and goals, stressing that Iraq's commitment to maximizing associated gas investment projects, and achieving the standards and objectives stipulated in the Paris Agreement.
For his part, Malcolm Mays, Managing Director of Basra Gas Company, said: “We are pleased to sign this agreement with the International Finance Corporation, which is the first loan agreement of its kind in the oil and gas sector, and it is a milestone of which we are proud. This agreement demonstrates the strength of Iraqi companies, such as Basrah Gas Company and its ability to attract financing and trust from international banks.The aim of this five-year loan is to support the company's growth project, the Basra Gas-Liqued Processing and Separation Plant (BNGL) project and converting wasted flare gas into much-needed energy for the country.Our strategy is in line with the government's vision "This agreement would not have been possible without the continued support of the Ministry of Oil, the International Finance Corporation and our shareholders."
In a related development, Sergio Pimenta, IFC Vice President for the Middle East and Africa, said: “This pilot project has the potential to deliver significant environmental and economic benefits, including reduced greenhouse gas emissions and increased financial revenues, as well as improving access to energy and lowering costs at Iraqi citizens.This project comes after years of hard work and strong cooperation by all parties involved. We hope to send a strong signal to other investors to support more investments in tackling climate change and supporting inclusive growth in Iraq.”
The IFC investment consists of $137.76 million as a loan from the IFC's own account, and a $180 million syndicated loan to eight international banks (Bank of China, Citibank, Deutsche Bank AG, Industrial Commercial Bank of China, Natixis, Sumitomo Mitsui Banking and Societe General, Standard Chartered Bank), and a $42.24 million loan through the IFC Syndication Managed Lending Portfolio Program, a platform that allows institutional investors to participate in the IFC loan portfolio.
The project benefits from the World Bank Group's long-term engagement in the energy sector in Iraq. Iraq joined the Global Gas Flaring Reduction Initiative in 2011 and in 2013 committed to eliminating all routine natural gas flaring by 2030.
Hamza Abdel-Baqi, General Manager of South Gas Company, said: "A historic achievement achieved by Basra Gas Company by signing the contract with the International Finance Corporation (IFC), according to which the company will receive an amount of $360 million, which will achieve financial stability for the company and enable it to move forward with its five-year plan. In progress towards international competition, as well as supporting local projects and supplementing the national electricity network. We at the South Gas Company, in cooperation with partners from Shell and Mitsubishi, and with the support of the Ministry of Oil, are working to achieve the government’s vision to maximize investment in associated gas and transform it into energy that benefits the Iraqi people.”
Ali Al-Janabi, Vice President of Shell in Iraq said: “We are proud to be partners in the Basra Gas Company joint venture, which is the cornerstone of Iraq’s gas utilization strategy, as we produce gas that feeds 75% of Basra’s electricity demand and Gas LPG to meet more than 65% of the country’s total demand.Besides providing gas for power and industry, BGC plays a vital role in the local economy through recruitment and contracting activities as well as the collection of otherwise flared gas thus significantly improving air quality for the local communities in Basra As an Iraqi, I am particularly proud of this partnership and its positive impact.”
Kunihiko Sakaki, Regional President (Middle East), Mitsubishi, said: “As a joint venture partner of Basra Gas Company (BGC), we are pleased to agree on this agreement with IFC. Not only does BGC contribute to reducing greenhouse gas emissions By processing gas that burns, but also contributed to Iraq’s energy supply by providing feed gas to power plants, and creating jobs through business expansion.This loan will enable Basrah Gas Company to accelerate the Growth Project (BNGL), leading to Increasing the contribution to the collection and processing of gas, stable energy supply and job creation. Once again, we are proud to be a partner in the Basrah Gas Company joint venture and at the same time we are pleased to contribute to supporting Iraq through this project.”
It is noteworthy that the Basra Gas Company is a 25-year joint venture between the Iraqi South Gas Company, which owns 51% shares, and Shell Company, which owns 44% of the shares, in addition to Mitsubishi, which has shares of 5%.
The production rates of the Basra Gas Company reach about 900 million standard cubic feet per day, and this amount of gas is sufficient to produce 3.4 kilowatts of electric power that is sufficient to equip millions of homes and factories in Iraq. The company is currently collecting more than 60% of the gas emitted from three oil fields from the first licensing round: the Rumaila field, West Qurna 1 field, as well as the Zubair field. The Basrah Gas Company is the main center for gas collection and processing in southern Iraq, making it the main Iraqi company for the processing of associated gas and the main source of hydrocarbons used for power generation. The Basra Gas Company provides about 80% of the local market's need of liquefied gas (cooking gas), in addition to the continuous development of its export capabilities, supporting Iraq by diversifying sources of financing and transforming it into a country completely exporting liquefied petroleum gas (cooking gas).
Since the launch of its activities in 2013 until the end of 2020, the Basra Gas Company played an important role in reducing the quantities of carbon dioxide emissions resulting from burning associated gas, as the company was able to prevent approximately 110 million tons of carbon dioxide emissions from entering the atmosphere, and this is what The CO2 emission is equivalent to 3.5 from coal power plants during the same period, or the equivalent of removing 2.9 million cars from the road for the same period (2013 to the end of 2020).
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