PROJECT

Projects

Environmental & Social Review Summary

Project Number

39146

Company Name

BASRAH GAS COMPANY

Date ESRS Disclosed

Oct 4, 2019

Country

Iraq

Region

Middle East

Last Updated Date

Dec 25, 2021

Environmental Category

B - Limited

Status

Active

Previous Events

Approved : Nov 7, 2019
Signed : Jun 24, 2021
Invested : Dec 23, 2021

Sector

Oil and Gas Transport or Pipeline

Industry

Metals and Mining

Department

Regional Industry INF MCT

Project Description

 Basrah Gas Company (“BGC” or the “company”), is an Iraqi midstream natural gas company that commenced its operations in May 2013 to gather, treat and process associated gas that would otherwise be flared at the license round 1 oil fields of West Qurna 1, Zubair and Rumaila in southern Iraq. BGC is a 25-year joint venture with state run South Gas Company holding a 51% stake, Shell 44% and Mitsubishi 5%. BGC is one of the largest flare reduction projects in the world and has turned Iraq from a net importer to a net exporter of LPG. The proposed project will enable BGC to prevent over 9.5 million metric tonnes of CO2 equivalents per year from entering the atmosphere by reducing upstream gas flaring (compared to 2020 levels).

IFC is seeking to finance the development of the Basrah Natural Gas Liquids (“BNGL” or the “project”) plant, consisting of two natural gas liquids trains, each of 200 million standard cubic feet per day capacity. The capture and processing of associated gas from the upstream oil fields is currently limited by the capacity of BGC’s existing natural-gas-liquids (“broadcut” or “NGL”) plants and export infrastructure. Construction of the BNGL facility will expand gas processing by introducing additional NGL separation gas treatment.

BNGL will treat the associated gas to meet the domestic gas specification and supply gas to the regional gas grid. NGL, consisting of liquid petroleum gas and condensate, will be separated from the gas at the BNGL facility and sent to the liquid petroleum gas separation processes at BGC’s Khor Al Zubair (“KAZ”) facility. The BNGL process will also remove hydrogen sulfide from the gas producing a biological sulfur product intended to be used for the domestic Iraqi market.

The BNGL project scope comprises three main elements, namely i) the BNGL process trains, ii) works in the immediate vicinity of the process trains, including power and water supply, iii) four pipelines and their tie ins including a 13.7 km feed gas pipeline from BGC’s North Rumaila NGL plant, an 80 km broadcut export to the BGC KAZ facility, a 10.2 km dry gas pipeline to connect to the Iraqi gas grid, and a 17 km water supply pipeline from the Rumaila Operating Organization’s Al Nukhail Water Pumping Station.

The North Rumaila NGL and KAZ facilities were constructed and became operational in the early 1980’s and are therefore not considered as “associated facilities” to the BNGL project. 

Overview of IFC's Scope of Review

 IFC’s environmental and social due diligence of this project consisted of the appraisal of technical, environmental, health, safety and social information submitted by BGC. A lenders’ Independent Engineer (“IE”) was commissioned by IFC assessing both the environmental and social aspects of the BNGL project along with the engineering and technical aspects of the operation. The consultant produced an independent due diligence report which has been reviewed by BGC, IFC and other lenders.

IFC’s E&S appraisal team undertook a field visit in March 2019 meeting with members of BGC’s senior management team, project teams, BGC’s corporate health, safety and environment (“HSE”) manager, environment manager and environmental advisors, human resources, social performance, operations managers and supporting teams at the respective plants and corporate and asset level security management. IFC also visited three existing BGC processing assets, namely the Umm Qasr storage and marine terminal, the North Rumaila NGL and NSC2 and the KAZ NGL plant. Complementing IFC’s appraisal visit, the IE undertook a field appraisal in August 2019 visiting the NR NGL and KAZ NGL plants, compressor station 2 and the Umm Qasr storage and marine terminals. 

E & S Project Categorization and Applicable Standard

Environmental and Social Mitigation Measures

Stakeholder Engagement

Broad Community Support

Environmental & Social Action Plan

Client Documentation

File Name Actions
BGC BNGL ESHIA_Final_issued 19.07.2018.pdf