An Iranian company is the biggest beneficiary of a power plant poised to supply a Shell-backed gas project in Iraq, showing the pervasive presence of Tehran’s business interests in its neighbour and putting the UK group at odds with the west’s shifting geopolitical priorities in the Middle East, the Financial Times reports.
Basrah Gas Company, which is 44 per cent-owned by the London-listed energy major, will become a major consumer of power from Rumaila Independent Power Plant in southern Iraq when the gas company’s new facility starts operations in June.
The Rumaila plant is owned by Jordan-based Shamara Holding but was built by Tehran-based Mapna Group, which is entitled to 78 per cent of the revenue from electricity sales, according to documents seen by the Financial Times and three people involved in the contracts.
Shell’s joint venture, which has received World Bank funding, has been widely praised for its role capturing gas that was previously flared at Iraq’s oilfields and processing it for use in local power generation, cooking or export. Iraq’s state-owned South Gas Company owns 51 per cent of the project and Japanese trading house Mitsubishi owns 5 per cent.
Shell and Basrah Gas both said they had no dealings with Mapna. There is no indication that payments from Basrah Gas for power from the Rumaila plant, made via Iraq’s ministry of electricity, will violate US or European sanctions on dealing with Iran.
However, Mapna’s role in the power plant reflects the extent to which companies close to the Iranian regime have become embedded in the fabric of the Iraqi economy.