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Wed 8 Oct 2008 03:18 PM

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Shell forms JV in beleaguered nation

Iraq’s Ministry of Oil and Royal Dutch Shell have signed a Heads of Agreement to establish a joint venture between South Gas Company and Shell, for the processing and marketing of natural gas produced in the Governorate of Basra in southern Iraq.

Iraq’s Ministry of Oil and Royal Dutch Shell have signed a Heads of Agreement to establish a joint venture between South Gas Company and Shell, for the processing and marketing of natural gas produced in the Governorate of Basra in southern Iraq.

In an area covering some 19,000 km2, the JV will purchase roughly 700 million ft3 of natural gas from upstream operations that is currently being flared. It will also own and operate existing gas gathering, treating and processing facilities, repair non-functioning assets and develop new facilities.

"Shell is an industry leader in the global natural gas sector. Iraq has one of the world's largest natural gas resource bases and I am delighted that the Iraqi Government including the Ministry of Oil have supported Shell as the partner for joint venture with the South Gas Company. We look forward to moving jointly to implement the JV and begin investing in the energy infrastructure in Iraq," said Linda Cook, executive director for Royal Dutch Shell.

The JV structure is the model chosen by the Ministry of Oil as the vehicle to create a world-class natural gas industry in Iraq. South Gas Company will be the 51 percent majority shareholder in the JV, with Shell holding 49 percent. The signature follows the approval of the Iraqi Council of Ministers on 7th September 2008.

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