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UPDATE 4-Gas unit fire at Iraq's Rumaila to hit oil -BP

Tue, 20th Sep 2011 19:30


By Aref Mohammed

BASRA, Iraq, Sept 20 (Reuters) - A fire at a state-
run gas compression unit at Iraq's major southern oilfield Rumaila on Tuesday killed one person and hit oil production, police and oilfield developer BP said.

'We have stopped exporting gas that would have been exported into this compressor and this will have an impact on our production from Rumaila,' BP spokesman David Nicholas said in London, without offering figures for the cut in oil output.

Fire crews extinguished the blaze on Tuesday evening, oil ministry spokesman Asim Jihad said.

'Initial reports say a leakage at a gas pipeline was the cause of the fire,' Jihad said.

Sources at Iraq's South Oil Company earlier said excess pressure in a storage unit and high temperatures caused a leak that fueled the fire.

'As a result of the gas compression unit fire, we have nine workers seriously wounded. Some of them are suffering from severe burns,' an oil police source said.

'Three others are still missing ... and one worker was killed,' the source added.

Jihad said 15 workers were injured.

Oil major BP said the gas compression facility supplied the city of Basra with natural gas and was not part of its operations at the oilfield.

'It was an explosion at the South Gas Company ... which is next door to our facilities but they are not run by Rumaila at all,' Michael Townshend, president of BP-Iraq, told Reuters.

BP is developing Rumaila along with China National Petroleum Corp..

Earlier, sources at Iraq's South Oil Company had said the fire was at a crude oil processing unit at the Rumaila oilfield. The sources later confirmed the fire was at a gas compression unit. The South Oil Company and South Gas Company are state firms under Iraq's oil ministry.

The gas produced as part of the process of extracting oil from the field -- so-called associated gas.

Another BP spokesman said: 'As a precautionary measure Rumaila Operating Organisation (ROO) has shut in some oil production to stop supplies of associated gas to the affected Southern Gas Company gas compression plant. No further details for the time being.'

A chief oil engineer at the South Oil Company said the fire erupted while workers were carrying out maintenance work at the gas compression facility, which he said was situated on Rumaila.

'As a result of the fire, BP should now halt production at some oil wells until making sure the gas pipeline is totally closed and no gas leakage still exists,' the engineer said.

'Then they can resume operations at their degassing station by flaring the gas that was being supplied to the Iraqi gas compressor before the fire.'

Rumaila pumps almost half of Iraq's output and has some 17 billion barrels in estimated crude reserves.

BP is one of the biggest players in Iraq involved in the push to increase the country's oil production levels to rival OPEC's top producer Saudi Arabia.

Iraq's contracts with foreign firms could boost its output capacity to 12 million bpd by 2017, but most analysts say 6-7 million bpd is a more realistic target.



(Additional reporting by Ahmed Rasheed and Rania El Gamal in Baghdad and by Tom Bergin in London; Writing by Serena Chaudhry; Editing by Anthony Barker) Keywords: IRAQ OIL/RUMAILA

(serena.chaudhry@thomsonreuters.com)(+964 7901 917 024)(Reuters Messaging: serena.chaudhry.thomsonreuters.com@reuters.net)

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