Chinese oil, gas contractor inks deal to construct gas plant in Iraq

China's Petroleum Engineering and Construction Corporation (CPECC) and Iraq's Basra Gas Company (BGC) signed Wednesday a contract for constructing a natural gas liquids (NGL) plant in Iraq's southern province of Basra.

Liu Haijun (R), president of China's Petroleum Engineering and Construction Corporation (CPECC), shakes hands with Frits Klap, managing director of Basrah Gas Company, at the contract signing ceremony in Basra, Iraq, on Feb. 27, 2019. [Photo/Xinhua]

During the signing ceremony, CPECC President Liu Haijun said "we are delighted to have been selected by BGC to be part of this strategically important gas project. Winning this important contract represents a new recognition of our proven capacity in project execution in Iraq."

"We look forward to working with the BGC team to a safe and efficient project delivery and to extending our cooperation with BGC's clients in their future projects," Liu said.

For his part, BGC managing director Frits Klap said "this is a significant milestone. We are happy to see that CPECC has been awarded to be the main contractor for the Basra-NGL plant -- responsible for all the construction, installation and the site works for the plant," Klap said.

He said that the BGC will increase current gas production capacity by 40 percent, by developing the new Basra NGL facility.

The new project will also reduce gas flaring and increase dry gas supply and NGL export capabilities.

The Basra NGL facility will be built in Ar-Ratawi area in west of Basra and is scheduled to complete at the end of 2020.

In Iraq, the associated oil gas is currently being burned, resulting in the loss of millions of dollars in Iraq as well as the negative impact on the environment. Such NGL plant is expected to bring financial benefits to Iraq as well as using the gas to fuel power stations to generate electricity.