BGC is a public/private joint venture between the Iraqi Ministry of Oil through its subsidiary South Gas Company (51%), Royal Dutch Shell plc (“Shell”) (44%) and Mitsubishi Corporation (“Mitsubishi”) (5%).
South Gas Company is wholly-owned by the Iraqi government. It previously owned and operated the natural gas infrastructure in southern Iraq, which was transferred to BGC at its inception.
Shell is an international, vertically integrated energy company with expertise in oil, gas and low carbon energy. Shell is the third largest company in the world as measured by its 2018 revenues and the largest listed on the London Stock Exchange (LON: RDSA).
Mitsubishi is a global, integrated company with activities in 90 countries across a wide range of industries, from natural gas and mineral resources to automotive, food, power solutions and urban development. Mitsubishi has a primary listing on the Tokyo Stock Exchange (TYO: 8058).
The BNGL project cost is estimated at US$1 billion over the next 5 years. IFC’s proposed investment consists of a US$400 million Green Loan which will include an A loan of up to US$200 million for IFC’s own account, a loan under IFC’s Managed Co-Lending Portfolio Program (“MCPP”) and up to US$200 million in mobilization from commercial banks. The remainder will be funded by operating cash flows.
IFC’s proposed investment has been certified as a Green Loan. The external reviewer has confirmed that the use of proceeds is aligned with the Green Loan Principles 2018. In addition, it has also been classified as Climate-related by IFC in accordance with the IFC Definitions and Metrics for Climate Related Activities and the Joint Multilateral Development Banks’ Methodology for Climate Finance Tracking. According to publicly available information, this would be the first Green Loan in Iraq, and also likely be the first Green Loan globally dedicated to gas flaring reduction.
| Product Line | IFC Investment (million USD) |
|---|---|
| Risk Management | |
| Guarantee | |
| Loan | 157.76 |
| Equity |
BGC’s operations are located throughout the Basrah province in southern Iraq.
Basrah Gas Company
P.O. Box 2705 Al Ashar Post, Khor Al Zubair,
Basrah, Republic of Iraq
This is a Category B project according to IFC’s Policy on Environmental and Social Sustainability. The\nproject is expected to have limited adverse environmental or social risks and/or impacts that are few in\nnumber, generally site-specific, largely reversible, and readily addressed through mitigation measures. The\nBNGL plant will be located within long established, sparsely populated oil field areas in southern Iraq and the\nimpacts and risks of operating the new the plant will not pose significant risk to the surrounding environment\nor communities. Those risks can be avoided or mitigated by adhering to recognized industry standards,\noperating procedures, guidelines and design criteria as described in the following sections.\n
Key environmental and social considerations relate to; i) ensuring the contractors comply with the\nenvironmental and social management system and associated obligations and plans for construction including\naspects related to occupational health and safety; ii) contractor compliance with Performance Standard 2:\nLabor and Working Conditions; iii) ensuring adequate emergency response for all project components; and iv)\npipeline operations in accordance with good international industry practices (“GIIP”). BGC’s management\nsystems and supporting procedures refer to and have been developed to align with the Performance Standards,\nWBG general EHS guidelines and applicable WBG industry sector guidelines.
Basrah Gas Company (“BGC”) is an Iraqi midstream natural gas company created to gather, treat and process associated gas flared at oil fields in southern Iraq. BGC commenced operations in May 2013 and operates compressor stations, various gas processing plants, a pipeline network and a storage and marine terminal for export. It produces dry gas for sale into the Iraqi gas grid, and liquefied petroleum gas (“LPG”) and condensate for local consumption and export. The project entails the design and installation of a new gas processing plant, the Basrah Natural Gas Liquids (“BNGL”) facility, part of a broader expansion plan to increase BGC’s raw gas processing capacity from 1 billion standard cubic feet per day (“bscfd”) currently to 1.4 bscfd by 2024.