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Houston-based Orion Gas Processors signed a deal with Iraq's oil ministry to process natural gas extracted at the country's Nahr Bin Omar oilfield.

The memorandum of understanding, signed in Baghdad January 22 by representatives of the oil ministry and the U.S. company, will allow Orion Gas Processors to build facilities to capture the gas from the field located in southern Iraq and to transform it into usable fuels. Reuters reported the news.

Nahr Bin Omar is operated by state-run Basra Oil Co. and produces more than 40,000 barrels per day of oil (bpd) and 25 million cubic feet a day of natural gas.

Iraq currently burns off some of the gas extracted alongside crude oil at its fields because it lacks the facilities to process the gas into fuel for local consumption or exports.

As part of the deal, Orion will capture and process 100 million to 150 million cubic feet/day (mcf) of gas. The gas will be used to fuel power stations and to produce up to 10 million liters of gasoline, equivalent to 32 percent of Iraq’s total imports of the fuel.

Gas flaring across Iraq should end by 2021, the news agency quoted Iraqi energy officials as saying.

Iraq's oil minister reportedly plans to visit Kuwait in February to finalize a deal on exporting Iraqi gas. The two countries are discussing a pipeline project to bring 50 mcf of Iraqi gas per day to Kuwait for 10 years. Volumes could rise to 200 mcf per day over the period.

The exports would come from the Rumaila field and would be used as feedstock for a petrochemical plant. Payments would help retire Baghdad’s final $4.6 billion in war reparations owed for its 1990 invasion of Kuwait.