Algeria’s state-energy company Sonatrach has agreed to take part in projects to develop Iraq’s natural gas industry, the Iraqi Oil Ministry said in a statement, on Monday.
Algerian Energy Minister, Mustapha Guitouni, and Iraqi Oil Minister, Jabar al-Luaibi, signed a preliminary agreement in Baghdad to form joint ventures between Sonatrach and Iraqi natural gas companies, the statement said.
Iraq flares some of the gas extracted with crude oil at its fields because it lacks facilities to process it into fuel for local consumption or export.
Algeria is a major supplier of gas to Europe, exporting it by pipeline to the continent and shipping it on tankers as liquefied natural gas (LNG).
“Sonatrach will work with Iraqi gas producing companies to invest in processing gas produced from oilfields to supply electrical power plants and the petrochemical and fertilisers industries”, Luaibi said in the ministry statement.
Iraq is the second biggest crude producer in the Organization of the Petroleum Exporting Countries, with output of 4.4 million barrels per day (bpd). Fellow OPEC member Algeria has estimated output of 1 million bpd.