meed-logo

line1 line2 line3
SIGN IN / REGISTER

Chinese companies win 95% of all Iraqi energy projects

6 September 2024

Commentary
Wil Crisp
Oil & gas reporter

Companies headquartered in China have won 95% of all major project contracts awarded in Iraq’s oil, gas, chemicals and power sectors so far this year, as they increase their dominance in the market.

A total of $12.1bn in energy project contracts were won by Chinese companies during the first eight months of 2024, according to data gathered by regional project tracker MEED Projects.

The only major award so far this year that was not won by a company or partnership that was 100% Chinese, was the contract to rehabilitate the Baiji 2 gas-fired power station, which is estimated to be worth $1.3bn by MEED Projects.

This contract was awarded to a consortium of Beijing-headquartered China State Construction Engineering Corporation (CSCEC) and German technology conglomerate Siemens.

Commenting on the figures, one industry source said: “China has been a dominant force in Iraq’s energy sector for a long time and this is only increasing as time passes.

“The huge presence that China has in the country’s energy sector is a source of concern for Iraq’s leadership, which doesn’t want to cede control of so many important infrastructure projects to companies from any single country.”

“The problem is, other countries are reluctant to take on the risks of doing business in Iraq and at the same offer the competitive prices that Chinese contractors can offer.”

The biggest energy project contract won by a Chinese contractor so far this year is the agreement for the development of the Al-Faw Investment Refinery project.

The client on the project, state-owned Southern Refineries Company, signed a contract with CSCEC in May this year.

The refinery will have a capacity of 300,000 barrels a day and will produce oil derivatives for both domestic and international markets.

The project will be carried out in two stages. The first phase will involve refining operations, while the second will involve constructing a petrochemicals complex with a capacity of 3 million tonnes a year.

The wider project also includes the construction of a 2,000MW power plant and the establishment of the Al-Faw Academy for Refinery Technology, to train 5,000 Iraqi workers that will eventually work at the facility.

Hualu, a subsidiary of China National Chemical Engineering Company (CNCEC), signed a preliminary principles agreement for the project in December 2021.

At the time, Iraq’s Oil Ministry said that the project would have an investment value of $7bn-$8bn.

MEED Projects has estimated that the contract value of the deal signed with CSCEC in May for the refinery project is about $4bn.

Other energy project contracts won by Chinese companies during the first eight months of this year included the contract for the Artawi 1,000MW photovoltaic solar power plant in Basra.

This contract, estimated to be worth $1bn, was awarded to China Energy Engineering International Group.

Chengdu-based DongFang Electric Corporation was awarded the main contract for a project to convert the Baghdad South power plant into a combined-cycle gas turbine power plant.

The project is estimated to be worth $85m and will increase the capacity of the power plant by 125MW-625MW.

Also this year, a subsidiary of PetroChina, the listed arm of state-owned China National Petroleum Corporation, signed an agreement to develop Iraq’s Nahr Bin Umar onshore gas field.

The subsidiary, PetroChina Halfaya, was awarded the build-own-operate-transfer contract, which is estimated to be worth about $400m.

Iraq’s Oil Ministry said that the field will have an initial output capacity of 150 million cubic feet a day.

The project is expected to be completed within 36 months and will include the construction of gas-gathering facilities, storage tanks and pipeline networks to supply gas to power stations.

Strong performance

Chinese contractors also performed well in Iraq’s energy sector in terms of the value of contract awards in 2023.

Last year, Chinese contractors won $2.3bn in Iraqi energy sector contracts, almost half of the $4.8bn that was awarded.

Looking at the data for 2023 and the first eight months of 2024 together, Chinese companies won $14.5bn in contracts, 82% of the $17.6bn in energy project contracts awarded over the period.

The second closest competitors were companies from Germany, which won just over $1bn in contracts, 6% of all awards.

Iraqi companies were third, winning $816m in contracts, according to the data compiled by MEED Projects.

Contracts were also won by companies from Italy, the Netherlands and Turkiye.

Iraq is currently in the midst of a push to try and increase the volume of work being carried out by US companies in the country’s energy sector.

Earlier this month, Iraq announced that it was planning to offer about 10 gas exploration blocks to international companies in a new licensing round that will be launched during a visit to the US by Iraqi Oil Minister Hayan Abdel-Ghani.

Abdel-Ghani said that he will be specifically targeting US companies in the upcoming round.

Earlier this year, the US international oil and gas company ExxonMobil completed its exit from Iraq’s West Qurna-1 oil field, handing over operatorship to PetroChina.

Exxon’s plan to exit the West Qurna-1 oil field was first announced in April 2021, when Iraq’s Oil Ministry said the US-based oil company was considering selling its 32.7% stake.

 

https://image.digitalinsightresearch.in/uploads/NewsArticle/12460160/main3355.jpg
Wil Crisp

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

Click here to register
Exclusive from Meed
Related Articles
  • WEBINAR: GCC water projects market outlook and review

    15 September 2025

    Register now

    Date & Time: Wednesday 24 September 2025 | 11:00 AM GST

    Agenda:

    1. Latest updates on the GCC water sector projects market

    2. Summary of the key water sector contracts and projects awarded year to date

    3. Analysis of the key trends, opportunities and challenges facing the sector

    4. Highlights of key contracts to be tendered and awarded over the next 18 months

    5. Long-term capital expenditure outlays and forecasts

    6. Top contractors and clients

    7. Breakdown of spending by segment, i.e. desalination, storage, transmission and treatment

    8. The evolution of the PPP model framework in the delivery of water projects

    9. Key drivers and challenges going forward

    Hosted by: Edward James, head of content and analysis at MEED

    A well-known and respected thought leader in Mena affairs, Edward James has been with MEED for more than 19 years, working as a researcher, consultant and content director. Today he heads up all content and research produced by the MEED group. His specific areas of expertise are construction, hydrocarbons, power and water, and the petrochemicals market. He is considered one of the world’s foremost experts on the Mena projects market. He is a regular guest commentator on Middle East issues for news channels such as the BBC, CNN and ABC News and is a regular speaker at events in the region. 

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667833/main.gif
    MEED Editorial
  • Alec set to launch IPO on Dubai Financial Market

    15 September 2025

    UAE-based Alec Holdings has announced that it will list 20% of its share capital on the Dubai Financial Market through an initial public offering (IPO).

    According to an official statement, the firm will offer 1 billion shares, representing 20% of its share capital. The subscription will be offered in three tranches and will open on 23 September and close on 30 September.

    The first tranche comprises individual subscribers, the second includes professional investors, and the third tranche is reserved for eligible employees of Alec and the Investment Corporation of Dubai (ICD).

    ICD, the investment arm of the Government of Dubai, is currently the sole shareholder of Alec. It will retain 80% of Alec’s issued share capital following the offering.

    Emirates NBD Capital and JP Morgan Securities have been appointed as joint global coordinators. Both firms, along with Abu Dhabi Commercial Bank and EFG Hermes, have been appointed as joint bookrunners.

    Moelis & Company is the independent financial adviser.

    Emirates NBD has been appointed as the lead receiving bank.

    Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Al-Maryah Community Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Islamic Bank, First Abu Dhabi Bank, Mashreq Bank and Wio Bank have also been appointed as receiving banks.

    “Alec intends to distribute a cash dividend of AED200m, payable in April 2026, and a cash dividend of AED500m for the financial year ending 31 December 2026, payable in October 2026 and April 2027,” the statement added.

    “The company further intends to distribute cash dividends in April and October of each year, with a minimum payout ratio of 50% of the net profit generated for the relevant financial period, subject to the approval of the board of directors and the availability of distributable reserves,” Alec said.

    Alec Holdings’ core businesses include Alec Construction and Target Engineering.

    Other businesses include Alec Fitout, Alemco, Alec Data Centre Solutions, Alec Technologies, Alec Lite, Alec Facades, Linq Modular, Alec Energy and AJI Rentals.

    READ THE SEPTEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Doha’s Olympic bid; Kuwait’s progress on crucial reforms reinforces sentiment; Downstream petrochemicals investments take centre stage

    Distributed to senior decision-makers in the region and around the world, the September 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667572/main.jpg
    Yasir Iqbal
  • Kuwait sets October deadline for residential PPP bids

    15 September 2025

     

    Kuwait’s Public Authority for Housing Welfare (PAHW) has invited local and international firms to submit their statements of qualifications (SoQs) by 30 October for a tender covering the development of three residential cities under a public-private partnership (PPP) framework.

    The projects will be developed on a design, finance, build, operate, maintain, sell and transfer basis. The contract term is 30 years, with four years allocated for construction.

    The projects include:

    • Al-Mutlaa City (2.12 million square metres)
    • East Saad Al-Abdullah City (1.02 million sq m)
    • West Saad Al-Abdullah and the commercial services strip in Jaber Al-Ahmad City (1.01 million sq m)

    Interested companies can collect the request for qualification (RFQ) documents between 18 September and 1 October.

    To qualify, firms must have at least 10 years of experience in delivering large-scale residential or mixed-use developments.

    These projects will be the first to be implemented under Kuwait’s new real estate development law, introduced in 2023. The law opens Kuwait's housing sector to private investment and enables the establishment of joint ventures between local and foreign investors to deliver new developments on a PPP basis.

    Kuwait construction market overview

    Kuwait’s construction and infrastructure projects market continued its recovery in the first half of 2025, with over $1.8bn-worth of contracts awarded by 8 August.

    The outlook for the remainder of the year appears promising, following the government’s approval of capital spending worth KD1.7bn ($5.7bn) in May for more than 90 projects.

    According to local media, these projects include rail, road, water and electricity infrastructure, as well as the Grand Mubarak Port.

    The country invested over $45bn in construction and transport projects during 2015 and 2016, amid high oil prices. However, parliamentary gridlock and declining oil revenues since then led to a slowdown in contract awards.

    The sector has seen particularly low award levels since 2019, when the total fell below $2bn for the first time. Awards increased modestly in 2020 and 2021, but then dropped again to a low of $1.4bn in 2022.

    In contrast, 2023 marked a significant recovery, with awards reaching $3.6bn.

    According to data from regional tracker MEED Projects, 2024 was the best year in recent times, with contract awards totalling approximately $5.6bn for construction and infrastructure schemes.

    READ THE SEPTEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Doha’s Olympic bid; Kuwait’s progress on crucial reforms reinforces sentiment; Downstream petrochemicals investments take centre stage

    Distributed to senior decision-makers in the region and around the world, the September 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667516/main.jpg
    Yasir Iqbal
  • Lowest bidders emerge for Oman Sinaw-Duqm road

    15 September 2025

     

    Oman’s Ministry of Transport, Communications and Information Technology has opened bids for two contracts covering the upgrade of sections three and four of the Sinaw-Mahout-Duqm road.

    According to results published by the Oman Tender Board, local firm Galfar Engineering & Contracting submitted the lowest bid of RO51m ($215.6m) for section three of the project.

    The other bidders are:

    • Strabag ($206m)
    • Sarooj Construction ($244.3m)
    • Rimal Global Group ($285.6m)
    • Oman Gulf Company (undisclosed)

    The third section spans 83 kilometres (km) and extends from the Al-Jouba roundabout in the Wilayat of Mahout towards Duqm. It consists of a single carriageway with two lanes, each lane measuring 3.75 metres in width. 

    For the fourth section, the Austrian firm Strabag submitted the lowest bid of RO79m ($206m).

    The other bidders for this section include:

    • Galfar Engineering & Contracting ($215.6m)
    • Sarooj Construction ($244.3m)
    • Rimal Global Group ($285.6m)
    • Oman Gulf Company (undisclosed)

    This section of the project spans about 49km, stretching from Sarab to the boundaries of the Special Economic Zone at Duqm near Nafun.

    This project will serve as a key piece of infrastructure linking North Al-Sharqiyah to the Special Economic Zone at Duqm.

    UK analytics firm GlobalData expects the Omani construction industry to register an annual average growth rate of 4.2% from 2025 to 2028, supported by investments as part of the Oman Vision 2040 strategy. Under this strategy, the government plans to allocate RO20bn ($52bn) to the tourism sector and aims to attract 11 million visitors annually by 2040. 

    The infrastructure construction sector was estimated to grow by 6.1% in 2024 and is projected to record an annual average growth rate of 5.4% from 2025 to 2028. Growth will be driven by Muscat’s efforts to upgrade the road, railway and airport infrastructure to improve connectivity across the sultanate.

    READ THE SEPTEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Doha’s Olympic bid; Kuwait’s progress on crucial reforms reinforces sentiment; Downstream petrochemicals investments take centre stage

    Distributed to senior decision-makers in the region and around the world, the September 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667488/main.gif
    Yasir Iqbal
  • October deadline for Riyadh rail link prequalification

    15 September 2025

     

    Saudi Arabia Railways (SAR) has allowed contractors until 12 October to prequalify for a contract covering the construction of a new railway line, known as the Riyadh rail link, which will run from the north to the south of Riyadh.

    The scope of work includes the construction of a 35-kilometre-long double-track railway line, connecting SAR's North-South Railway with the Eastern Railway network.

    The contract also includes the procurement, construction and installation of associated infrastructure, including viaducts, civil works, utility installations, signalling systems and other associated works.

    Last week, MEED reported that SAR had invited consultants to prequalify by 28 September for a contract covering design review and construction supervision for the Riyadh rail link project.

    The project is expected to become a key component of the Saudi Landbridge railway.

    The Saudi Landbridge is an estimated $7bn project comprising more than 1,500km of new track. Its core component is a 900km new railway between Riyadh and Jeddah, which will provide direct freight access to the capital from King Abdullah Port on the Red Sea.

    Other key sections include upgrades to the existing Riyadh-Dammam line and a link between King Abdullah Port and Yanbu.

    The start of the tendering activity for the Riyadh rail link project makes the construction of the Saudi Landbridge project even more likely. 

    The project is one of the kingdom’s most anticipated infrastructure programmes. Plans to develop it were first announced in 2004, but the project was put on hold in 2010 before being revived a year later.

    Key stumbling blocks were rights-of-way issues, route alignment and its high cost.

    In December 2023, MEED reported that a team of US-based Hill International, Italy’s Italferr and Spain’s Sener had been awarded the contract to provide project management services for the programme.

    If it proceeds, the Landbridge will be one of the largest railway projects ever undertaken in the Middle East – and among the biggest globally.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/14667475/main.jpg
    Yasir Iqbal