Iraq signs 1.07-bln-USD deal with Chinese company to process gas in Halfaya oilfield

Guests attend a signing ceremony at the Iraqi Oil Ministry in Baghdad, Iraq on May 8, 2019. (Xinhua/Khalil Ddawood)

Iraq and a Chinese company signed on Wednesday a 1.07-billion-U.S. dollar agreement to process associated gas extracted from Iraq's southern giant Halfaya oilfield.

In the signing ceremony at the Iraqi Oil Ministry in Baghdad, PetroChina, which is the listed arm of state-owned China National Petroleum Corporation, signed a contract for gas processing plant (GPP) project with China Petroleum Engineering and Construction Corporation (CPECC).

The contract aims to process associated gas with capacity of around 300 million cubic feet of standard gas per day from Halfaya oilfield.

Also in the ceremony, Maysan Oil Company, the owner of Halfaya oilfield, signed a memorandum of understanding with PetroChina, which is the main operator of Halfaya oilfield, to ensure the implementation of the required specifications included in the contract with CPECC.

GPP project will contribute to reducing gas flare pollution to environment, and will also contribute significantly to resolving power shortage problem by providing dry gas to power stations in Maysan province.

Iraqi Oil Minister Thamir al-Ghadhban said in the ceremony that "the GPP project signed today between PetroChina and CPECC, is one of the important and strategic projects for developing the gas industry in Iraq."

"The contract will stop the burning and waste of gas and will provide jobs for many Iraqis," al-Ghadhban said.

For his part, China's Ambassador to Iraq Zhang Tao said in the ceremony that "the relations between China and Iraq have seen a significant progress in all fields, particularly in oil and gas field."

"We have many companies working in cooperation with Iraq's oil ministry," he said, adding that "cooperation in the field of oil and energy is an important part of the cooperation between the two countries, as China is the biggest importer of the Iraqi oil."

Liu Haijun, president of CPECC, said that "the project of processing gas in Halfaya is of great importance for the development of Iraq's economy, and will contribute to providing sufficient dry gas for power stations."

He said that one of the priorities of CPECC is providing job opportunities for Iraqis in the project as well as transferring modern technology to Iraq.

GPP project is scheduled to complete after 30 months, making Halfaya the first oilfield eliminating gas flaring in Iraq.

Halfaya is located in east of the Maysan's provincial capital Amarah, and it is the largest oilfield of Maysan oil company, producing about 400,000 barrel per day.