Iraq and China Petroleum Engineering and Construction Corporation (CPECC), an affiliate of China National Petroleum Corporation (CNPC), signed a deal to build and operate facilities to process Iraqi Halfaya oilfield’s extracted natural gas and crude oil, Zawya reported.

Under the $1.07 billion contract, CPECC will process around 300 million standard cubic feet per day (mscf/d) of natural gas extracted from the field.

Halfaya oilfield is operated by PetroChina and is producing around 370,000 barrels per day (b/d), more than half of the company’s total output of nearly 510,000 b/d.

Moreover, Iraq plans to continue to flare some of the gas extracted alongside crude oil at its fields because it lacks the facilities to process it into fuel for local consumption or exports.