The Iraqi Government has approved a $17bn joint venture project with Royal Dutch Shell and Mitsubishi to capture gas being flared at the country’s southern oilfields.

The companies expect to export 600 million cubic feet of gas per day.

The joint venture company, to be named Basra Gas Company, will capture and use gas being burned off at the oilfields of Rumaila, Zubair and West Qurna Phase One.

The gas deal, of which Iraq owns a 51% share, is part of a series of contracts the government has signed with oil firms in order to boost the country’s crude output capacity to 12 million barrels per day.

Iraq’s proven natural gas reserves stand at 112 trillion cubic feet, according to a 2007 report from the US Government’s energy statistics unit.