(Updates with Luaibi comments from second paragraph.)
June 5 (Bloomberg) -- Iraq, eager to supply natural gas to its overburdened power plants, signed agreements with Korea Gas Corp., Kuwait Energy Co. and Turkiye Petrolleri AO to develop two gas fields.
The three companies secured rights to develop the Mansouriya field in Iraq’s eastern Diyala province, while Turkiye Petrolleri and Kuwait Energy won a license for the Siba field in southern Basra province, Oil Minister Abdul Kareem al- Luaibi said. The government awarded rights to both deposits in October, together with a license to a third field called Akkas.
“Iraq needs to develop these fields in order to provide for the needs of its electricity stations,” Luaibi said today during the signing ceremony in Baghdad and in the presence of Turkish Energy Minister Taner Yildiz. “Iraq also aims to become a major source for gas in the future,” the Iraqi minister said.
Iraq has the fifth-biggest gas reserves in the Middle East, according to data from BP Plc. While the government relies on sales of crude oil for most of its revenue, it wants to produce gas to fuel the nation’s power stations, which have been unable for several years to meet demand. Production of electricity and gas, like oil, suffered from decades of war and sanctions, and Iraq is seeking foreign investment and expertise to boost output.
Mansouriya, discovered in 1979, holds an estimated 4.5 trillion cubic feet of gas, Luaibi said. The three companies hold a 20-year license for the field and are obligated to start producing 320 million cubic feet within six years, he said.
Siba, discovered in 1968, has 1.5 trillion cubic feet of gas. Turkiye Petrolleri and Korea Gas, known as Kogas, have development rights there for 20 years and are committed to begin producing 100 million cubic feet within six years, Luaibi said.
Iraq signed a separate agreement with Kogas on June 1 to produce gas at Akkas, ending seven months of delays for the project. The Korean company took over after its original partner, KazMunaiGas Exploration Production of Kazakhstan, unexpectedly withdrew. Akkas, in western Anbar province in 1998, holds 5.6 trillion cubic feet of gas and has six wells, Hussain al-Shahristani, the deputy prime minister for energy affairs and former oil minister, said in May.
The government is also negotiating an agreement with Royal Dutch Shell Plc and Mitsubishi Corp. on a $12 billion plan to develop and capture gas that is being flared off and wasted in southern Iraq. A final agreement is due to be reached this week, Deputy Oil Minister Ahmed al-Shamma said on June 1.
Iraq has signed 15 gas and oil licenses since the U.S.-led invasion overthrew former President Saddam Hussein in 2003. The government has asked companies to begin this month submitting bids for a new, fourth round of exploration rights.
--Editors: Bruce Stanley, Shanthy Nambiar
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