Shell's partnerships in gas fired power for energy access
Basrah Gas Company, Iraq
Basrah Gas Company is an Iraqi joint venture established by the Iraqi Government and Shell to meet an Iraqi challenge. That challenge is to turn Basrah Province’s abundant endowment of natural gas into a blessing for the current and future generations.
While Iraq has the potential to be one of the world’s top gas producers, it is the fourth largest gas flaring country in the world and has a shortage of natural gas for power generation, LPG and condensate.
At present, Iraq produces only around 1 billion cubic feet of gas per day, and of that some 70% is being flared because of a lack of infrastructure to capture, transport, treat and process it due to decades of wars and sanctions. To put things into perspective, we estimate that if this gas is turned into electricity, it would generate roughly 4.5 GW which is sufficient to supply some three million homes or if monetized, could inject around $3.5 billion per year into Iraq’s economy.
With Iraq’s ambitious plan to increase oil production and become one of the world’s top oil producers, it is estimated that 5000 mmscf of gas per day will be produced within the next few years which makes it essential to invest in new capacities to reach this planned throughput.
In order to capture the flared resource Basrah Gas Company (BGC) was created. It is a 25-year joint venture with state run South Gas Company holding a 51% stake, Shell 44% and Mitsubishi 5%. It is a midstream gas project designed to capture, treat and monetise associated natural gas that is currently being flared in the license round 1 oil fields of West Qurna 1 (operated by ExxonMobil), Zubair (operated by ENI) and Rumaila (the largest of the three and operated by BP).
Operations officially commenced on 1st May 2013, with currently processing capacity in excess of 500 million standard cubic feet of gas per day (scf/d). In December 2014 BGC achieved a new processing record of 500 mmscf/d of gas and a new LPG production record of 2650 tonnes per day.
BGC attains a phased-approach to develop the project (rehabilitation, rejuvenation and expansion) and has a strong focus on local content employing 5,500 Iraqi staff and 400 Shell experts on secondment whilst completing more than 28,500 man days of training.
Bonny Utility Company, Nigeria: Providing access to reliable and affordable electricity to communities in Bonny Island, Nigeria
The Bonny Utility Company (BUC), a mini utility services company operating on Bonny Island in Nigeria, was established in 2001 to address the energy needs of urban communities living in the vicinity of the Joint Industry Committee’s (JIC) operations. Prior to the BUC, those communities had long faced problems with unreliable power supply and depended heavily on diesel generators, which caused noise and air pollution and fell short of providing an environment conducive to social and economic development. Therefore, the JIC decided to upgrade the electricity distribution system and replace stand-alone diesel generators with gas turbine electricity generated from Nigeria LNG (NLNG) and Shell Petroleum Development Company (SPDC). In addition to the feedstock supplied by SPDC and NLNG to the BUC injection station, the JIC funds the company’s operations, enabling it to provide the local community with subsidized power.
A wasted resource today
Flaring is a heavy environmental burden as it contributes to greenhouse gas emissions that cause global warming.
Iraq's flaring generates around 20 million tonnes per year of CO2 emissions, the equivalent of 90,000 flights from Basrah to Hong Kong or the use of 3.5 million cars.
70 per cent of all natural gas produced in Iraq is flared, rather than captured. Enough to provide electricity for more than 15 million homes if it was captured and used.
In addition, enough LPG is lost through flaring in Iraq to fill around 250,000 LPG cylinders per day.