Iraq aims to sign a final agreement on November 24 with Royal Dutch Shell for a $17 billion deal to capture gas, which is currently flared off in oilfields, to generate much-needed power, a senior oil ministry official said on Wednesday.

Iraq's cabinet on Tuesday approved the deal with Shell and partner Mitsubishi to help Iraq use more than 700 million cubic feet per day of gas that is now being burned off at three major oilfields around the southern oil hub of Basra.

Deputy Oil Minister Ahmed al-Shamma said the agreement will be signed with Shell officials on Thursday next week or the week after if the executives cannot attend the signing.

'The gas will be treated, manufactured and supplied to Iraq,' Shamma told reporters.

The agreement forms a company called Basra Gas Company - a JV with state-run South Gas Company holding 51 per cent, Shell 44 per cent and Mitsubishi 5 per cent - to capture gas from Rumaila, Zubair and West Qurna fields.

The 25-year deal could include a LNG export facility with a maximum capacity of 600 million cubic feet of gas per day once Iraq's own domestic gas needs are met.

The Shell project could eventually handle up to 2 billion cubic feet of gas per day.

The Shell deal is one of the largest energy agreements signed by Iraq and a key project as it rebuilds and modernizes its oil sector and economy after years of war and sanctions.

More than eight years after the invasion that toppled Saddam Hussein, Iraq is still struggling with daily power shortages, and using the flared gas is key to increasing electricity supplies in the Opec member nation.-Reuters