A large gas project Iraq will sign with a consortium led by Royal Dutch Shell PLC (RDSA) on Sunday will start production in 2013, a senior Iraqi oil ministry official said Friday.

Ali Hussein Khudhier, head of the state-run South Gas Co., an affiliate of the Iraqi Oil Ministry, also said the deal, worth up to $17.2 billion, will be able to utilize all the gas being burned now by 2017.

Iraq is currently producing some 1 billion cubic feet a day of gas from southern oil fields, but some 700 million of them are being flared because of lack of infrastructure.

"We won't have any flared gas in 2017," Khudhier told Dow Jones Newswires on the sideline of an oil and gas conference and exhibition in Basra , southern Iraq .

Khudhier said new gas compressors have already been contracted for purchase, and they will be ready in 2013.

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