Vinson & Elkins, and Cleary Gottlieb Steen & Hamilton are advising Iraq’s oil ministry in a $17.2 billion deal with Royal Dutch Shell and Mitsubishi to develop the infrastructure required to process natural gas in the southern part of the war-torn country.
The transaction agreements, which were signed on Nov. 27, came as Iraq attempts to rebuild its oil and gas industry following years of sanctions and conflict.
The 25-year contract, one of the biggest deals that Iraq has signed in recent times, will see the creation of a new company called the Basrah Gas Company (BGC). The BGC will process gas from three large fields near Basrah in southern Iraq to satisfy domestic consumption requirements. It will also have the right to pursue a Liquefied Natural Gas (LNG) or other gas export project for any remaining gas.
Currently, an estimated 700 million standard cubic feet per day of natural gas is being burned. The project, apart from halting the environmental damage and economic waste, is expected to provide reliable domestic electricity generation, and also promote economic and industrial development.
The Vinson's team includes partners Christopher Strong and Ahmed el-Gaili, while the Cleary Gottlieb team includes partners Andrew Bernstein and Gamal Abouali. “We are thrilled to be working with the Ministry on such an innovative and large-scale project,” said Ayman Khaleq, Vinson & Elkins' Middle East managing partner, in a statement. “The signing was a key milestone for this deal which is significant to the overall gas industry in Iraq, and it’s a privilege to be a part of that,” he said. ALB
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