Iraq's Basrah Gas Company exports first semi-refrigerated LPG shipment

Move expected to help company access more markets and boost capacity

The cargo was shipped from the BGC Umm Qasr jetty on Monday. Photo: BGC

Iraq's Basrah Gas Company has exported its first semi-refrigerated liquefied petroleum gas shipment as part of plans to boost the country's LPG exports.

The cargo was shipped from the BGC Umm Qasr jetty, marking "a historical achievement in BGC’s and Iraq’s history", the company said in a statement.

The move will triple the number of vessels available to the company and double its load size in one operation, said Malcolm Mayes, BGC's managing director.

"Additionally, we can have access to wider markets and destination terminals that are restricted to accept refrigerated product only," he said.

"Our strategic plan for the future is to maximise semi-refrigeration exports and eventually participate in the global LPG-trading market when we start exporting fully refrigerated LPG."

Demand for the refined product is growing worldwide. LPG is used mainly as a cooking fuel stored in cylinders for stoves, as well as a propellant, refrigerant, for vehicle fuel and as feedstock for the petrochemicals industry.

The process of semi-refrigerating LPG requires cooling the product to the right temperature to load it on to ship tanks with lower pressure, BGC said.

The mixed LPG is pumped through the chiller units at Umm Qasr, where the product is cooled to the required temperature before being pumped into the ship.

The semi-refrigerated ships can load larger volumes of LPG than pressurised ships.

"BGC has been working relentlessly to meet its strategic plan. By upgrading Umm Qasr Marine Terminal and installing the necessary chiller units, we were able to bring this project into fruition," Mr Mayes said.

"Now LPG can be loaded on both pressurised and semi-refrigerated ships, which will increase the number of vessels that our export customers can use to trade LPG produced by BGC."

BGC is a 25-year joint venture between Iraq’s South Gas Company, which holds 51 per cent of its shares, Shell (44 per cent) and Mitsubishi Corporation (5 per cent).

The company captures associated gas that is currently being flared from three oil fields in southern Iraq — Rumaila, West Qurna 1 and Zubair.

BGC helped transform Iraq from a net importer to a net exporter of LPG in 2016, creating a new revenue stream for the country.

It provides more than 80 per cent of Iraq’s LPG demand.

"With the development of its export capabilities, BGC will potentially support Iraq to diversify its revenue streams and become a global player in the LPG market," the statement said.

Last year, BGC received more than $360 million in funding from a consortium including the World Bank's International Finance Corporation and eight international banks to expand its Basrah Natural Gas Liquids extraction plant.

The expansion will contribute to increasing BGC’s capacity to process an additional 400 million standard cubic feet of gas a day from nearby producers, it said at the time.