meed-logo

line1 line2 line3
SIGN IN / REGISTER

Iraq’s energy sector steadily expands

15 May 2023

MEED's latest coverage on Iraq's energy projects market includes:

> PIPELINE STOPPAGE: Turkiye yet to respond to Iraqi oil request
> CHEMICALS: Iraq continues technical studies for $8bn chemical project
> UPSTREAM DEVELOPERS: No place like Iraq for international oil firms
> OIL TRAINS: Key Iraq oil project units arriving in third quarter
> GAS: Iraq gas project on track for commissioning this year
> INVESTMENT: Total deal could lead to project boom in Iraq
> RUMAILA FIELD: BP and PetroChina prepare to award Iraq oil contract

 

Iraq's oil and gas projects market has steadily expanded over recent months, with the total value of the country's active oil, gas and chemical projects rising by nine per cent since the start of 2020.

As of 2 May 2023, Iraq’s active oil, gas and chemical projects were worth an estimated $143.9bn, up from $132.2bn on 7 January 2020, according to data collected by the regional project-tracking service MEED Projects.

Over the period, in nominal terms, the country’s energy project market expanded by $11.7bn, which is far larger than some of its regional competitors, but also lagging behind some key markets that are continuing to see a dramatic expansion in project activity.

In terms of energy project market expansion, Iraq has outperformed countries such as Algeria, Kuwait and Libya.

Countries that have performed far better than Iraq include Egypt, Qatar, Saudi Arabia and the UAE.

Over the period, energy project activity has surged in Saudi Arabia, which overtook Iraq to become the region’s largest market for hydrocarbon projects in mid-2022.

Since the start of January 2020, the total value of Saudi Arabia’s active oil, gas and chemical projects has increased by $61.3bn, rising from $112.7bn to $174.1bn.

Over the same period, the total value of Egypt’s active oil, gas and chemical projects sector has expanded by $46.6bn, according to MEED Projects, rising to $136.1bn.

Nations such as Saudi Arabia and Egypt have made ground on Iraq in terms of the size of their energy project markets, partly by taking advantage of Europe’s efforts to shift away from Russian energy imports.

They are also investing in hydrocarbon and chemical technologies that will likely see increased demand during the ongoing global energy transition, such as upstream gas production, the production of the precursors to plastics, and ammonia production.

Political uncertainty

While Iraq has seen its energy projects market steadily expand, it has missed out on the dramatic growth seen in Saudi Arabia and Egypt due to a range of factors.

A key factor that has hobbled Iraq’s expansion over recent years has been political instability and an inability to make critical policy decisions regarding the country’s economy.

In 2022, the caretaker government failed to pass a budget amid political wrangling. The interim parliament, which had limited access to funds, passed a $17bn emergency package called the Food Security and Development Bill, but was not mandated to make important decisions about major projects.

Multi-year budget

From a political perspective, there is reason to be more optimistic about Iraq’s ability to make future investment decisions due to the finalisation of a three-year budget law in March this year.

A draft budget of ID197.82tn ($152.17bn) was announced for 2023, with an agreed operational expenditure of ID150.27tn ($115.59bn), and an investment expenditure of ID47.55tn ($36.58bn).

The budget is drafted to allow it to be repeated in 2024 and 2025. It is the first time an Iraqi government has drafted a multi-year budget, having typically passed one-year budgets.

Ahead of the budget agreement, Iraq made a string of major project announcements. These include plans to revive the $8bn Nebras petrochemicals complex in Basra.

The multi-year budget should also allow for more strategic projects to pass over the coming months, allowing Iraq to adapt to changing market conditions, including the global energy transition and shifting dynamics in Europe and Asia.

Iraq has already signalled that it is looking to modernise its downstream oil sector, improving the complexity of existing refineries and building new facilities.

Gas projects

In terms of gas sector projects, progress will likely be made on existing projects to capture gas from oil fields that would otherwise be flared. More projects of this type could be announced shortly.

Iraq and its international partners are likely to prioritise these projects because they provide increased gas supplies and new revenue streams and have a positive environmental impact.

Iraq-Turkiye tensions

Although the political outlook is improved by the increased certainty regarding annual budgets, the country’s energy projects market could experience growing disruption over the coming months due to tensions between Iraq’s federal government, the Kurdish Regional Government (KRG) and the government of Turkiye.

At the end of March, in the wake of a ruling by the International Chamber of Commerce Court of Arbitration last month, the oil export pipeline that extends from the north of Iraq to the Turkish port of Ceyhan was shut down.

The pipeline is a key export route for Iraq. When operating normally, it transports 400,000 barrels a day (b/d) from Iraqi Kurdistan and 70,000 b/d from the rest of Iraq.

On 4 April in Baghdad, Iraqi Prime Minister Mohammed al-Sudani and the Prime Minister of the Iraqi Kurdistan Region, Masrour Barzani, signed a temporary agreement designed to restart oil exports from the north of the country.

Despite this, after more than a month, oil exports via the pipeline are yet to resume.

The lengthy stoppage and lack of clarity over when exports will recommence have cast a shadow across Iraq’s oil sector, forcing oil fields in the north of the country to seal wells and stop production and putting the future of planned upstream projects in doubt.

While there remains a cause for concern regarding political stability in Iraq, the fundamentals for the country’s oil and gas sector remain sound.

Iraq's state-owned oil companies and their international partners have shown in the past that they can negotiate difficult political and security situations, and the country will likely be able to continue to steadily grow its energy projects market over the months to follow.

MEED's June 2023 special report on Iraq includes:

> GOVERNMENT: Sudani makes fitful progress as Iraq's premier
> ECONOMY: Iraq hits the spend button
> POWER: Iraq power projects make headway
> UPSTREAM DEVELOPERS: No place like Iraq for international oil firms
> CHEMICALS: Iraq continues technical studies for $8bn chemical project
> SOLAR: Total continues 1GW Iraq solar talks
> TRANSPORT: Baghdad approves funds for metro and airport projects

 

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/10825124/main.gif
Wil Crisp

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

Click here to register
Exclusive from Meed
Related Articles
  • Rabigh 2 IPP expansion secures $2.58bn financing

    5 October 2026

    Saudi Arabia's Rabigh 2 combined-cycle gas-turbine (CCGT) independent power project (IPP) expansion has reached financial close.

    In a disclosure to the Saudi Exchange, Acwa said it had secured SR9.69bn ($2.58bn) in long-term financing for the project, which has a generation capacity of 2,313.5MW.

    In April, MEED reported that  Acwa and Saudi Energy (formerly Saudi Electricity Company) had signed a 31-year power purchase agreement (PPA) with Saudi Arabia’s principal buyer, Saudi Power Procurement Company (SPPC), for the project.

    The project involves the development of a combined-cycle gas turbine (CCGT) plant in the Mecca region. It is being developed by Al-Morjan Two Electricity Company, with Acwa and Saudi Energy each owning a 40% stake in the project.

    The contract is valued at SR11.5bn ($3.07bn), the companies said in separate stock exchange filings at the time. The carbon-capture-ready power plant will be implemented under a build, own and operate contract.

    The financing has a tenor of about 34 years and was provided by a consortium of local, regional and international lenders.

    The lenders are:

    • Abu Dhabi Commercial Bank
    • Alinma Bank
    • Boubyan Bank
    • China Minsheng Banking Corporation, Hong Kong Branch
    • Commercial Bank of Dubai
    • HSBC Bank Middle East
    • Industrial and Commercial Bank of China
    • Industrial Bank, Beijing Branch
    • National Bank of Greece, Cyprus
    • Riyad Bank
    • Saudi Awwal Bank
    • Saudi National Bank
    • Standard Chartered Bank, Taiwan
    • Sumitomo Mitsui Trust Bank, London Branch

    The project scope also includes financing and expansion of a 380kV electrical substation.

    According to regional project tracker MEED Projects, construction works have commenced on the project and a joint venture of Egypt's Elsewedy Electric and China's Sinohydro has been working as the main contractor.

    Rabigh 1 extension

    In January, Saudi Energy announced a spearate energy conversion agreement with SPPC for the purchase of electricity from the Rabigh 1 power plant expansion.

    The contract is valued at SR5.33bn ($1.42bn).

    It covers the development, financing, construction, ownership and operation of the gas-fired power plant, which will have a generation capacity of 1,179MW.

    A joint venture of Elsewedy Electric and Germany’s Siemens Energy is undertaking the engineering, procurement and construction work for the project, which is expected to be completed by the end of 2026.

    US/India-based Synergy Consulting is the financial advisory consultant to Saudi Energy on this project.

    Acwa also recently started initial commercial operations at the Taiba 1 and Qassim 1 combined-cycle gas turbine (CCGT) power plants, as reported by MEED.

    The plants have a combined generation capacity of about 3.8GW and are two of four projects procured under the first round of Saudi Arabia’s gas-fired independent power producer (IPP) programme by Saudi Power Procurement Company.

    A team of Saudi Energy, formerly Saudi Electricity Company, and Acwa won the contract to develop and operate the projects in 2023.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/20270643/main.jpg
    Mark Dowdall
  • Contractors submit bids for Libya refinery

    5 October 2026

     

    Bids have been submitted for the main contract for Libya’s planned South Refinery project and are currently under technical evaluation, according to industry sources.

    The project, located in Ubari in southern Libya, has gained momentum over the past year, and the main contract is anticipated to be worth more than $600m.

    The main contract is expected to use the engineering, procurement and construction (EPC) model.

    The EPC work is expected to take 50 months, and the facility will be designed to process 30,000 barrels a day (b/d) of crude oil.

    In March, US-based engineering company KBR was awarded a contract by Zallaf Exploration, Production & Refining of Oil & Gas Company to provide project management and technical services for the project.

    Under the terms of the contract, KBR will provide contract management, project management and supporting technical services throughout the project’s EPC phases.

    The refinery is expected to produce:

    • Propane and butane for domestic and industrial uses
    • Gasoline
    • Kerosene
    • Diesel
    • Fuel oil

    In March, KBR said that the project was aligned with its “long-standing commitment to advancing vital oil and gas infrastructure in Libya”.

    Libya currently operates five main refineries with a combined nameplate capacity of 380,000 b/d, but actual throughput is closer to 180,000 b/d due to poor maintenance and damage from military clashes.

    In addition to the South Refinery project, Libya also plans to upgrade the Zawiya refinery and carry out projects at the Serir, Brega, Tobruk and Ras Lanuf refineries.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20267178/main.jpg
    Wil Crisp
  • Dubai tenders sewage and stormwater projects

    5 October 2026

    Dubai Municipality has issued tenders for a 3,000-cubic-metre-a-day (cm/d) sewage treatment plant (STP) and a strategic stormwater drainage system.

    The first tender is for the design and construction of the Al-Lissaily STP.

    The project, identified as DS311/1, covers the design, supply, installation, construction and commissioning of the plant in the Al-Lissaily area.

    Dubai Municipality’s Sewerage and Recycled Water Projects Department is issuing the tender. The bid submission deadline is 29 October.

    The facility is located near residential communities and farming areas. The project will therefore include measures for odour control, treated effluent quality, noise mitigation and environmental performance.

    The municipality said the plant will incorporate landscaping and architectural features designed to reflect Dubai’s heritage character and the surrounding farming environment.

    The second tender is for project TF-07-C1, a strategic stormwater drainage system covering more than 100 million square metres.

    The project area extends from Sheikh Mohammed Bin Zayed Road (E311) to the north to Emirates Road (E611) to the south, and from Expo Road in the west to Dubailand in the east.

    The project will provide stormwater infrastructure and service connections for more than 20 private developers, as well as the Al-Yalayis 5 community.

    It will also support major roads in the Jebel Ali area, including Sheikh Mohammed Bin Zayed Road, Emirates Road, Sheikh Zayed Road, Sheikh Zayed Bin Hamdan Al-Nahyan Road, Hessa Street, Al-Yalayis Road and Al-Fay Road.

    The scope includes a major stormwater gravity drainage system, with pipeline diameters of up to 3,000mm.

    Dubai Municipality said the project is intended to increase drainage capacity, improve relief for existing and new stormwater systems, and strengthen protection against extreme rainfall events.

    The bid submission deadline is 22 October.

    The municipality also recently invited contractors to bid for a contract to upgrade and rehabilitate the stormwater system in Abu Hail.

    The project comprises a stormwater pumping station with a total discharge capacity of 26 cubic metres a second. It is estimated to cost up to $163m.

    Bid submissions are due by 15 October.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20266881/main.jpg
    Mark Dowdall
  • QatarEnergy gives North Field West topside bidders more time

    2 October 2026

     

    QatarEnergy has granted contractors more time to prepare bids for a tender covering the engineering, procurement, construction and installation (EPCI) of large platforms for the North Field gas field in Qatari waters.

    Contractors now have until 12 October to submit technical bids for the project, according to sources. Commercial bids are currently due on 10 November.

    The following contractors, among others, are understood to be bidding for the North Field West (NFW) production deck modules (PDMs) tender:

    • China Offshore Oil Engineering Company (China)
    • Larsen & Toubro Energy Hydrocarbon (India)
    • McDermott (US)
    • Saipem (Italy)

    The core scope comprises the EPCI of four PDMs and associated structures. The PDMs will increase gas production from North Field reservoirs and provide additional gas feedstock for the NFW liquefied natural gas (LNG) development.

    The tender, issued earlier this year, forms part of the wider NFW project, the third and final phase of the state enterprise’s North Field LNG expansion programme.

    The previous deadlines for technical bids were 30 August, 15 September and 28 September, while commercial bids were previously due on 25 October, as MEED reported.

    Before issuing the PDMs tender, QatarEnergy awarded US firm McDermott a contract for the EPCI of four offshore jackets that will also support gas feedstock supply for the NFW LNG project. The contract is estimated to be worth about $200m, MEED reported in January.

    North Field LNG expansion

    QatarEnergy is advancing the three phases of its estimated $40bn North Field LNG expansion project. EPC works on all three projects are progressing.

    QatarEnergy is understood to have committed nearly $30bn to the first two phases – North Field East (NFE) and North Field South (NFS) – which will lift Qatar’s LNG production capacity from 77.5 million tonnes a year (t/y) to 126 million t/y by 2028.

    QatarEnergy awarded the main EPC contracts for NFE in 2021. The project was intended to raise LNG output to 110 million t/y by 2025. The $13bn EPC package – covering the EPCI of four LNG trains, each with a capacity of 8 million t/y – was awarded in February 2021 to a consortium of Japan’s Chiyoda and France’s Technip Energies.

    In May 2023, QatarEnergy awarded the $10bn main EPC contract for NFS to a consortium of Technip Energies and Consolidated Contractors Company (CCC). The contract includes two LNG trains, each with a capacity of 7.8 million t/y.

    Once fully operational, the first two phases are expected to add 48 million t/y of LNG supply to the global market.

    QatarEnergy took the final investment decision on NFW earlier this year, awarding an EPC contract estimated at $8bn to a joint venture comprising Technip Energies, CCC and Gulf Asia Contracting in February.

    Chiyoda carried out the front-end engineering and design work for the NFW LNG project.

    The NFW scope covers the EPC of two LNG trains with a combined capacity of 16 million t/y, as well as associated facilities for gas treatment, natural gas liquids recovery and helium extraction.

    In addition to LNG, NFW is expected to produce about 175,000 barrels of oil equivalent a day of condensate, ethane and liquefied petroleum gas.

    With all three phases under EPC execution – and NFE scheduled for commissioning later this year – QatarEnergy is positioning itself to remain one of the world’s largest LNG suppliers in the long term.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20208200/main.jpg
    Indrajit Sen
  • Egypt implements oil and gas storage projects worth $1.1bn

    2 October 2026

    Egypt is implementing oil and gas storage projects worth a total of £E54bn ($1.1bn), according to a statement released by the country’s cabinet.

    Active developments include expanding El-Hamra Petroleum Port in El-Alamein on the Mediterranean coast, as well as building a jet-fuel storage and transport hub at the Badr depot in Cairo.

    Other projects include constructing new storage tanks at refinery complexes in Amreya, Alexandria; Assiut; and Cairo.

    Over the past 12 years, Egypt has built 84 petroleum storage facilities with a total capacity of 5.2 million tonnes, the cabinet statement said.

    Egypt has invested £E42.7bn ($880m) in developing these facilities, with the aim of bolstering domestic energy security.

    Completed infrastructure projects include facilities in Sohag (Upper Egypt) and Alexandria.

    They also include offshore terminal and storage facilities, a liquid bulk station in Ain Sokhna, and strategic crude oil storage tanks across the country.

    Storage facilities have become a strategic priority for Egypt since the US and Israel attacked Iran on 28 February, triggering a regional war that has disrupted shipping through the Strait of Hormuz.

    The disruption has made imports of hydrocarbon products into Egypt less predictable, increasing the importance of strategic stockpiles.

    READ THE OCTOBER 2026 MEED BUSINESS REVIEW – click here to view PDF

    Industry and logistics drive development at Neom; Saudi Arabia’s investment priorities realign amid conflict; MEED’s 2026 power developer ranking.

    Distributed to senior decision-makers in the region and around the world, the October 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/20208195/main.jpg
    Wil Crisp