Basrah Gas signs loan with IFC to limit gas flares

Iraq's Basrah Gas Company (BGC) and the International Finance Corporation (IFC) signed a US$360 million, five-year loan agreement, to fund a project to maximise utilisation of its natural gas resources by limiting the flaring of natural gas, according to a statement by the company on Tuesday.

Due to the absence of adequate infrastructure to process the gas, during oil production, the gas is flared. The company said that by  "capturing the gas byproduct for subsequent use by these customers, the project can help Iraq reduce overall emissions. IFC’s loan will partially fund the construction of a new gas processing plant, Basrah Natural Gas Liquid Extraction Plant (BNGL), part of a broader expansion plan to reduce gas flaring in southern Iraq."

According to the World Bank, gas flaring costs around US $2.5 billion in lost revenue for the government. 

 “This pioneering project has the potential to deliver significant environmental and economic benefits, including lower GHG emissions and increased fiscal revenues, and will improve energy access and lower costs for Iraqi citizens,” said Sérgio Pimenta, IFC Vice President for the Middle East and Africa, in a statement.