KBR of the United States and local engineering firm AKT have signed a detailed engineering contract for the West Qurna Gas Capture Project ordered by Basrah Gas Company (BGC) in Iraq. News of the contract was reported on September 18.
The West Qurna Gas Capture Project involves building facilities to recover, process, and utilize associated gas that had previously been burned off into the atmosphere through flaring during crude oil production at the West Qurna oilfield in southern Iraq’s Basrah region. Under this contract, KBR and AKT will carry out the detailed design phase, which is being conducted as part of Iraq’s Southern Gas Utilization Program.
The contract value has not been disclosed. The project targets flared gas generated at the West Qurna oilfield, with the recovered gas set to be used for domestic gas supply and power generation fuel in Iraq.
Iraq has long flared large volumes of associated gas during crude oil production, and has continuously pursued policies to recover this gas for domestic power generation and gas supply use. This contract is an extension of the gas recovery expansion strategy being pursued by Basrah Gas Company.
Iraq has been counted among the countries with the highest volumes of flared gas emissions globally, and investment in flared gas recovery projects has been increasing amid recent volatility in international oil and gas prices and growing demands for energy security. This contract demonstrates that global engineering firms such as KBR continue to secure order opportunities in the Middle East’s gas recovery and processing equipment market. As the Iraqi government has set flare reduction as a national priority, further related EPC awards may follow, and the recovered gas is expected to contribute to expanding domestic power generation fuel supply in Iraq. However, given Iraq’s history of project delays, the pace of transition to the actual construction phase warrants continued observation.
A primary point to watch is when and to which contractor the actual EPC contract will be awarded following completion of the detailed engineering. Whether additional details on the specific processing capacity and utilization plans for the recovered gas (such as the share allocated to domestic power generation fuel) will be disclosed is also of interest. In addition, it remains to be confirmed whether similar gas capture projects will follow at other oilfields within Iraq’s southern gas recovery program beyond West Qurna.