meed-logo

line1 line2 line3
SIGN IN / REGISTER

Iraq electricity sector makes slow progress

9 May 2024

Latest news from Iraq's power and water sectors:

> Iraq plans new Baiji power plant
> Decision imminent on Iraq waste-to-energy project
> Iraq discusses nuclear projects with global watchdog
> Siemens Energy and SLB sign Iraq flare gas-to-power deal
> PowerChina in talks for Basra desalination plant
> US seeks firms for Baghdad power plant package
> Iraq plans green hydrogen project at refinery
> Iraq approves long-term grid expansion

 

In late March, Iraq’s Electricity Ministry struck a five-year gas supply deal with National Iranian Gas Company for up to 50 million cubic metres a day (cm/d), contingent on the needs of Iraqi power stations, in exchange for oil and gasoline.

The deal offers a lifeline to Iraq’s deteriorating electricity sector and replaces an existing agreement whereby contractual volumes were theoretically set at 70 million cm/d for summer and 45 million cm/d for winter.

The two countries signed the deal following nearly three months of longer-than-usual power outages in Iraq, and after Baghdad settled part of the multibillion-dollar debt it owes Iran. The power cuts occurred due to a drastic reduction in Irani gas supply, which dipped to 10 million cm/d and wiped out 4GW from Iraq’s grid.

The deal is a compromise for both countries. It allows Iraq some breathing space to implement projects to reduce its dependence on Iran’s gas exports – a long-running and elusive objective among Iraq’s policymakers and its allies in the GCC states and the US.

The crisis should prompt Iraq to push ahead with projects to boost domestic gas production and build solar power plants, according to the Electricity Ministry.

Supply and demand mismatch

There has been a persistent mismatch between supply and demand in Iraq’s electricity sector, with peak demand during the summer months outstripping available capacity by a sizeable margin.

In recent years, the deficit has returned during the winter when heating requirements rise.

With a few exceptions, however, the procurement process or negotiations for additional generation capacity have been proceeding slowly, leaving a gap that is typically addressed by diesel generators.

Iraq aspires to build 12,000MW of solar capacity by the end of the decade, which is nearly half its known available capacity today.

The Electricity Ministry has signed deals with several companies to develop sizeable solar photovoltaic (PV) capacity over the past two to three years in line with this objective. Yet, despite regular pronouncements that the construction phase for these projects is about to start, none have reached final investment decisions (FIDs) or the construction phase so far.

The Electricity Ministry remains the dominant client for these projects, although the National Investment Commission (NIC) has been an active participant, particularly in bilateral or public-private partnership projects.

For example, the UAE’s Masdar signed a deal to develop 2GW of solar capacity in Iraq with the NIC. The commission is also procuring a contract to develop the country’s first waste-to-energy (WTE) project in coordination with the Municipality of Baghdad, the Electricity Ministry and the Environment Ministry.

Located in the Al Nahrawan area of Baghdad Governorate, the planned WTE project will have the capacity to treat 3,000 tonnes of waste a day and generate nearly 80 megawatt-hours (MWh) of electricity.

Other companies that have committed to develop solar PV projects in Iraq include Power China, which has pledged to develop solar PV projects with a combined total capacity of 2GW, and France’s Total Energies, which has committed to build a 1,000MW solar farm in Artawi.

The solar project in Artawi is a small part of a $27bn package that TotalEnergies is developing in partnership with QatarEnergy. The package involves the development of a common seawater supply project and oil and gas fields in Iraq.

Awarded projects

As earlier cited, there are some exceptions to the endemic start-stop mode for Iraq’s power generation and distribution projects.

For example, Germany’s Siemens Energy and the US-based GE have ongoing projects that include retrofitting or upgrading existing gas turbine power stations or building new substations as part of agreements to help rebuild Iraq and support its goal of reducing carbon emissions.

Earlier this month, the Electricity Ministry signed a preliminary agreement with Germany’s Siemens Energy and US firm SLB, formerly Schlumberger, to explore the development of a power generation plant using flare gas.

According to Siemens Energy Middle East managing director Dietmar Siersdorfer, the planned flare gas-to-power project in southern Iraq will help reduce carbon dioxide emissions and capture value from gas that would otherwise be wasted.

The planned flare gas-to-power plant could have a generation capacity of up to 2,000MW.

In January this year, China-based Oriental International is understood to have signed a contract to convert a single-cycle unit at the Baghdad South power plant complex into a combined-cycle power plant.

In April, the Electricity Ministry awarded another Chinese company, China Machinery Engineering Corporation (CMEC), a second year of operation and maintenance contracts for the Salah Al Din gas-fired power plant.

CMEC was awarded the estimated $1bn contract to build the power plant in northern Iraq in 2011. After a series of delays and challenges, including the Isis uprising, the two 630MW capacity units began operating last year.

In December last year, Siemens Energy also signed a contract to deliver five high-voltage substations on a turnkey basis in Iraq. The 400-kilovolt substations, each with a capacity of 1,500MW, will be installed in Baghdad, Diyala, Najaf, Karbala and Basra.

Similarly, the US’s preoccupation with helping wean Iraq off Iran’s gas and electricity imports has spurred projects to interconnect Iraq’s grid with its neighbour Saudi Arabia through the GCC grid and Jordan.

In October last year, the governor of Saudi Arabia’s Eastern Province, Prince Saud Bin Naif Bin Abdulaziz, inaugurated the GCC grid's Iraq connection, which had been under development for several years. The 295-kilometre power transmission network will have a total transmission capacity of 1,800MW, with an initial phase expected to supply 500MW of electricity to Iraq.

Future projects

In February this year, Electricity Ministry spokesperson Ahmed Mousa said the government had approved funds for the long-term plans to expand the country’s power transmission and distribution network with Siemens Energy’s help.

Mousa said the ministry “received funds for long-term plans to develop the electricity sector in 2023 … the three-year budget approved in 2023 also includes funds this year and in 2025”. 

In early May, it was reported that the Electricity Ministry held discussions with Qatar’s UCC Holding to develop a 2,100MW gas-fired power plant in Baiji. The plant will replace a power station that was damaged during the war.

It is unclear if the project is part of a previous agreement between UCC Holding and NIC to develop two power plants with a capacity of 2,400MW in Iraq.

A new 2,000MW gas-fired power plant is also being proposed in Basra, which is expected to receive gas from the nearby West Qurna 1 and West Qurna 2 oil fields.

As it is, several projects are waiting for final approvals, such as the gas-fired 2,800MW Khairat independent power producer, which has yet to reach FID over two years after the contract was awarded.  

Going nuclear 

Project delays and indecision in Iraq do not appear to narrow down the options for future power generation expansion.  

In March, it was reported that senior Iraq and International Atomic Energy Agency (IAEA) officials had discussed Iraq’s plans for a possible nuclear energy programme, including small modular reactors.

According to the nuclear watchdog, discussions included maintaining strict adherence to non-proliferation norms.

IAEA director general Rafael Mariano Grossi said his agency has committed to supporting the foundations of what should be an entirely peaceful programme in Iraq.

Iraq, for its part, is considering nuclear energy to enable greater energy security and for water desalination projects as part of the country’s plans for a more sustainable future.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11745270/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Accor and Al-Qimmah plan 4,000 Saudi rooms

    27 August 2026

    France's hotel operator Accor has expanded its partnership with local firm Al Qimmah Hospitality, a subsidiary of Saudi Arabia's BinDawood Investment Company, to develop more than 4,000 hotel rooms in the kingdom.

    The plan focuses on building a portfolio in Mecca and Medina.

    The expanded agreement was announced in Paris during the French-Saudi Investment Roundtable. It follows a master development agreement signed in 2025. The partnership now covers five hotels in Jeddah, Mecca and Medina across the premium, midscale and economy segments.

    One of the planned developments is an 850-room Novotel in Mecca, which is due to open in 2030. The agreement also covers the Mercure Makkah Shesha, ibis Styles Makkah Mesfalah, Movenpick Madinah and Swissotel Jeddah properties.

    The partnership will also support job creation and Saudi workforce development through Tamayyaz by Accor, the group's national talent programme run with the Saudi Ministry of Tourism. The programme aims to develop and hire more than 3,000 Saudi nationals by 2030.

    Accor has operated in Saudi Arabia for more than three decades and runs 48 hotels with more than 21,600 rooms nationwide. Its pipeline includes a further 47 properties comprising more than 11,400 rooms.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19051854/main.jpg
    Colin Foreman
  • Jeddah tenders stormwater drainage contracts

    27 August 2026

    Jeddah Municipality has invited contractors to bid for a contract covering the construction of a rainwater drainage network for the Prince Fawaz neighbourhood.

    The project aims to collect and convey rainwater away from residential streets and low-lying areas. It is valued at $60m and intended to reduce flooding risks during heavy rainfall.

    The scope includes manholes, stormwater catch basins and connections to existing manholes as well as the restoration of road surfaces.

    The bid submission deadline is 12 October.

    The municipality is also progressing with a second stormwater drainage project for the first package of Zone (BC), Old Zahraa in Jeddah Governorate, with bids due on 2 September. The project is valued at about $30m.

    The two projects are part of the muncipality's wider drainage programme including the flagship King Abdullah Road-Falasteen Road tunnel project,

    MEED previously reported that Saudi contractor Thrustboring Construction Company had been selected for phases one and two of the project, each valued at about $175m, covering the construction of large-diameter stormwater drainage tunnels.

    It is understood an official agreement has still yet to be signed.

    In June, MEED reported that local contractor Alkhorayef Water & Power Technologies (AWPT) had signed two contracts with Jeddah Municipality to operate and maintain stormwater and surface water drainage networks across the city.

    The contracts have a combined value of SR202.06m ($53.9m), and each will run for five years.

    The first contract, valued at SR108.46m ($28.9m), covers the operation and cleaning of stormwater and surface water networks in the South and Al-Malisa sub-municipalities.

    The second contract, worth SR93.59m ($25m), covers similar services for the Airport Sub-Municipality.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19039514/main.jpg
    Mark Dowdall
  • Saur and Nesma sign water infrastructure deal

    26 August 2026

    French firm Saur and local contractor Nesma & Partners have signed a deal to jointly "pursue the design and construction" of two recycled water plants in Riyadh.

    The memorandum of understanding (MoU) was signed during the French-Saudi Investment Roundtable Meeting in Paris on 24 August.

    It builds on an earlier agreement by the companies last September focusing on developing desalination and sewage treatment plants aceross the kingdom including project development, engineering, procurement, construction (EPC) and long-term operations and maintenance (O&M).

    At the time, the companies agreed to "target industrial water treatment through concession and operations contracts," extending the agreement beyond municipal water infrastructure.

    The latest agreement appears to mark a move from the broader partnership towards specific project opportunies in the Riyadh market. Details of the projects were not disclosed.

    In May, MEED exclusively reported that a consortium including Saur, Nesma and another local firm Al-Bawani was preparing to bid for the Riyadh East Independent Sewage Treatment Plant (ISTP) project, of which, the submission deadline was recently extended to 29 September.

    There are almost $2.5bn worth of water treatment projects at the pre-execution stage in Saudi Arabia, according to regional tracker MEED Projects.

    The French-Saudi Investment roundtable meeting was organised as part of Saudi Crown Prince and Prime Minister Mohammed Bin Salman’s state visit to France.

    Saudi Aramco also announced agreements and a memorandum of understanding (MoU) with French companies, worth a potential combined value of more than $3.7bn.

    Among the other agreements signed during the conference was a cooperation agreement between Saudi Energy and French public investment bank Bpifrance, valued at up to $3bn, to support financing for projects to develop and expand Saudi Arabia’s power grid.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19011713/main.jpg
    Mark Dowdall
  • Technip Energies secures role in Umm Shaif Gas Cap project

    26 August 2026

    France-based Technip Energies has secured a contract to provide detailed engineering services on a key offshore package part of the Umm Shaif integrated gas cap and surface pressure boosting project of Adnoc Offshore.

    The detailed engineering services deal was awarded as a sub-contract to Technip Energies by India’s Larsen & Toubro Energy Hydrocarbon (L&TEH), in its capacity as the main contractor on the package 1 of the Umm Shaif gas cap project.

    MEED previously reported about the offshore business of Abu Dhabi National Oil Company (Adnoc Offshore) awarding the main EPC contract for package 1 to a consortium of L&TEH and Saudi Arabia/UAE-based Lamprell.

    Both L&TEH and Lamprell have confirmed their respective contract awards.

    Under the detailed engineering contract, Technip Energies, in its statement on 26 August, said it “will draw on its strong local engineering capabilities and extensive experience with complex, large-scale offshore projects in the Middle East.”

    In July, Adnoc and its foreign partners announced a $6.2bn final investment decision (FID) for their project to produce up to 600 million cubic feet a day (cf/d) of natural gas by developing the Umm Shaif Gas Cap in Abu Dhabi.

    The Umm Shaif Gas Cap reserve is located within the offshore Umm Shaif and Nasr hydrocarbons concession, which is operated by Adnoc as the majority stakeholder. The other stakeholders in the concession are Italy’s Eni, France’s TotalEnergies and China National Petroleum Corporation (CNPC).

    Adnoc said the FID includes three EPC packages totalling $5.1bn for large-scale offshore infrastructure, awarded to consortiums comprising major UAE and international contractors. The company did not disclose the contractors or the scope of work.

    MEED reported in May that the following contractors had emerged as frontrunners for the two offshore packages and one onshore package of the Umm Shaif gas cap and surface pressure boosting project:

    • First offshore package – fabrication of a 30,000-tonne gas compression system: Larsen & Toubro Energy Hydrocarbon (India) / Lamprell (Saudi Arabia/UAE)
    • Second offshore package – fabrication of another 30,000-tonne gas compression system: McDermott (US)
    • Onshore package – EPC of gas inlet and processing systems on Das Island: China Petroleum Engineering & Construction Company (CPECC)

    McDermott recently confirmed its contract award for package 2, describing the order as “mega”, a term the company uses for jobs valued above $1bn.

    In its 21 July statement, Adnoc added that, as part of the FID, it has also awarded a $365m contract to its subsidiary Adnoc Drilling for a 14-well drilling and integrated drilling services scope, to be delivered over 18 months using three existing rigs.

    “The FID for Umm Shaif Gas Cap is the latest milestone in the company’s gas growth strategy and will unlock more than 600 million standard cubic feet per day of natural gas and associated gas liquids, equivalent to almost 10% of the UAE’s current daily gas consumption. The investment will reinforce the UAE’s energy security and its role as a reliable global energy supplier,” Adnoc said.

    Production from the development is expected by 2030, the Abu Dhabi energy giant said.

    “The UAE holds the seventh-largest gas reserves in the world. As global demand for reliable, lower-carbon energy continues to grow, Adnoc is unlocking more of the nation’s gas resources and expanding its liquefied natural gas (LNG) portfolio to meet the needs of its domestic and international customers and power industrial and artificial intelligence (AI) infrastructure growth,” it added.

    Umm Shaif Gas Cap project

    Adnoc Offshore, the offshore oil and gas business of Adnoc Group, is the operator of the Umm Shaif gas cap and surface pressure boosting project, MEED has reported.

    The primary objective is to increase gas production by 550 million cubic feet a day (cf/d) and raise associated condensate output by 50,000 barrels a day (b/d).

    Adnoc Offshore intends to feed about 520 million cf/d of the additional produced gas into Adnoc Group’s sales gas grid.

    Adnoc Offshore is understood to have issued the main EPC tender for the Umm Shaif gas cap and surface pressure boosting project in the first quarter of 2025.

    Contractors submitted technical bids for the three EPC packages by the 30 October deadline last year, while commercial bids were submitted by the 2 February deadline.

    The following contractors are among those understood to be bidding for the three EPC packages, according to sources:

    Offshore package 1:

    • Saipem (Italy) / Seatrium (Singapore)
    • Larsen & Toubro Energy Hydrocarbon (India) / Lamprell (Saudi Arabia/UAE)
    • NMDC Energy (UAE) / Hyundai Heavy Industries (South Korea)

    Offshore package 2:

    • China Offshore Oil Engineering Company (COOEC)
    • McDermott (US)
    • Larsen & Toubro Energy Hydrocarbon (India) / Lamprell (Saudi Arabia/UAE)
    • NMDC Energy (UAE) / Hyundai Heavy Industries (South Korea)

    Onshore package:

    • Archirodon (Greece)
    • China Petroleum Engineering & Construction Company (CPECC)
    • Engineering for the Petroleum & Process Industries (Enppi; Egypt)
    • Galfar Emirates (UAE branch of Oman’s Galfar Engineering & Construction)
    • Target Engineering Construction Company (UAE)

    Australian firm Worley has performed front-end engineering and design (feed) work on the project.

    Umm Shaif gas production

    Adnoc Offshore operates the Umm Shaif hydrocarbons development, which is located 150 kilometres (km) northwest of the city of Abu Dhabi. The field is located in Abu Dhabi’s offshore Umm Shaif and Nasr hydrocarbons concession, previously operated by former Adnoc Group companies Adma-Opco and Zadco.

    In March and April 2018, Abu Dhabi’s Supreme Council for Financial and Economic Affairs (SCFEA) awarded a 10% stake in the Umm Shaif and Nasr offshore block to Eni, 20% to TotalEnergies and 10% to CNPC. Adnoc Group retained the majority 60% interest. The operators produce a total of about 460,000 b/d of oil from the Umm Shaif and Nasr block.

    Gas is produced from the Umm Shaif Khuff and Uweinat reservoirs, as well as from the Arab C and Arab D Early Production Scheme 2. The Umm Shaif Khuff reservoir is a formation that consists of dry gas volumetric reservoirs located in the Umm Shaif field.

    Khuff reservoirs have been in production in Abu Dhabi since August 1989. Umm Shaif Khuff gas is currently produced from 28 active wells within the Umm Shaif field. A majority of these wells supply gas to Adnoc Group subsidiaries Adnoc LNG and Adnoc Gas Processing, with the rest supporting oil reservoirs at the Umm Shaif field through gas injection.

    The Umm Shaif Super Complex (USSC) processes and transports oil, condensates and natural gas in separate pipelines to Das Island for further processing and export. The condensates collected from the USSC are transported to Das Island through an 18-inch pipeline stretching 34.4km, or are spiked into the 36-inch Adnoc main oil line.

    The gas collected from the USSC is transported to Das Island through two 46-inch pipelines, which also run 34.4km.

    Pressure at the Umm Shaif Khuff gas reservoirs will start to decline by the end of 2028. The flowing wellhead pressures at some of the Khuff gas wellhead towers are likely to reduce, so boosting well deliverability and increasing the flowrates is necessary.

    Therefore, new Khuff surface pressure boosting facilities are required to maintain the plateau – with a goal of achieving a 90% gas recovery factor – and increase production beyond the end of the plateau by lowering pressure at the Khuff reservoirs.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19009217/main5444.jpg
    Indrajit Sen
  • Wabag confirms $372m Kuwait desalination contract

    26 August 2026

    India's VA Tech Wabag has confirmed it has signed a contract to supply, install, operate and maintain the second phase of the Doha seawater reverse osmosis (SWRO) desalination plant.

    Wabag confirmed the signing in a Regulation 30 filing on 25 August to the National Stock Exchange of India and BSE Limited.

    The contract is valued at KD114.28m ($372m) and will be delivered by a Wabag-led unincorporated joint venture with Kuwait’s Heavy Engineering Industries & Shipbuilding Company (Heisco).

    In April, MEED reported that Kuwait’s Central Agency for Public Tenders had approved the recommendation of the Ministry of Electricity & Water to award the contract to the joint venture.

    It is understood that the decision then had to go through final approval from the Audit Bureau

    The project will deliver a production capacity of about 60 million imperial gallons a day (MIGD) equivalent to about 272 million litres a day.

    It will include the desalination plant with full reverse osmosis trains, pre- and post-treatment systems, recarbonation equipment, booster pumps, and safety and filtration systems. On-site solar photovoltaic systems will also provide part of the plant’s energy requirements.

    According to the filing, construction is scheduled to take 36 months, followed by a five-year operation and maintenance period.

    The Doha SWRO desalination plant is part of Kuwait’s broader programme to expand water production capacity and reduce reliance on thermal desalination methods.

    As reported by MEED, the Heisco/Wabag joint venture submitted the lowest of three bids for the project in August 2025.

    In April 2025, MEED reported that Kuwait had retendered the contract for the facility after the ministry cancelled the initial tender in June 2024.

    The Ministry of Electricity & Water awarded South Korea’s Doosan Heavy Industries & Construction – now known as Doosan Enerbility – a $422m contract in May 2016 to build the 60 MIGD Doha 1 SWRO plant.

    The contract marks Wabag's first project in Kuwait. In June, the contractor also won its first major contract in the UAE for the Ajman sewage biorefinery plant phase 3 project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19004753/main.jpg
    Mark Dowdall