BAGHDAD- Iraq and China Petroleum Engineering & Construction Corporation (CPECC) signed a $1.07 billion deal to build and operate facilities to process natural gas extracted alongside crude oil at Iraq's giant Halfaya oilfield.
CPECC, an affiliate of China National Petroleum Corporation (CNPC), will process around 300 million standard cubic feet per day (mcf/d) of natural gas extracted from the field alongside crude oil, the oil ministry said.
Halfaya, operated by PetroChina, is Maysan Oil Company's largest oilfield, producing 370,000 barrels per day (bpd) of the company's total output of around 510,000 bpd.
The current total production from Maysan Oil Company's oilfields is now around 630,000 barrels per day and expected to reach 700,000 bpd in one year.
Iraq continues to flare some of the gas extracted alongside crude oil at its fields because it lacks the facilities to process it into fuel for local consumption or exports.
At the signing of the deal on Wednesday, Iraqi oil minister Thamer Ghadhban said that Iraq is in talks with international oil companies to build a 300 million cubic feet gas plant to process gas from the West Qurna 2 and Majnoon oilfields. No company has yet been selected.
(Reporting by Ahmed Rasheed; writing by Raya Jalabi editing by Jason Neely and Louise Heavens) ((Raya.Jalabi@thomsonreuters.com;))