Plant will make Iraq largest petrochemical producer in the Middle East
Royal Dutch Shell (ticker: RDSA) signed a deal with Iraq on Wednesday for $11 billion to build a petrochemical plant in the southern oil hub of Basra. Shell has so far declined to comment on the size or types of output expected from the facility, but the facility is expected to produce 1.8 million tons of petrochemical products per year, reports Reuters.
Iraq’s Industry Minister Nasser al-Esawi told a news conference that the Nibras complex is expected to come online within five to six years, helping the country reach its goal of becoming a major regional energy player and of diversifying its economy. Currently, Iraq relies on oil for more than 90% of its revenue.
“The Nibras complex will be one of the largest (foreign) investments (in Iraq) and the most important in the petrochemical sector in the Middle East,” Esawi said.
“Shell has been working with the Iraqi ministers of industry and minerals and jointly with the ministries of oil and transport to develop a joint investment model for a world-scale petrochemical cracker and derivative complex in the south of Iraq,” a Shell spokesman said.
Shell is one of the main major oil companies operating in south Iraq, operating the Majnoon oilfield and leading the Basra Gas Company joint venture. It signed a memorandum of understanding with the ministry for the Nibras project in 2012.
The project will utilize ethane feedstock separated out from flared natural gas recovered from southern oil fields by the Basra Gas Company JV of state firm South Gas, Shell and Japan’s Mitsubishi. Iraq currently flares around 70% of gross 1.9 Bcf/day; 80% of which is produced in the south, according to the Middle Eastern Economic Survey.
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