Frontrunner emerges for $1.7bn Iraq gas processing complex
15 January 2025
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China Petroleum Engineering & Construction Corporation (CPECC) has emerged as the frontrunner to win the estimated $1.7bn contract to build a gas processing complex at the Ratawi oil and gas field development in Iraq’s Basra region.
The Ratawi gas processing complex is one of four projects constituting Iraq’s $10bn Gas Growth Integrated Project (GGIP), which is being developed by French energy major TotalEnergies and its partners. TotalEnergies is the main operator of the GGIP scheme. Basra Oil Company (30%) and QatarEnergy (25%) are the other stakeholders.
MEED previously reported that contractors submitted bids for the Ratawi gas processing complex project in October last year.
In addition to CPECC, the other bidders for the project are India’s Larsen & Toubro Energy Hydrocarbon and South Korea’s Daewoo Engineering & Construction, sources told MEED.
When commissioned, the planned facility is expected to process 300 million cubic feet a day (cf/d) of gas. Its capacity is expected to double when a second expansion phase becomes operational in the future.
The Ratawi gas processing facility project aims to improve Iraq’s electricity supply by capturing gas that would have otherwise been flared at several oil fields, including:
- Luhais
- Majnoon
- Ratawi
- West Qurna 2
- Tuba
Large gas volumes are flared from these oil fields, causing significant environmental damage. Collecting and processing flared gas will generate increased hydrocarbons revenues and reduce ecological damage.
The gas tapped and processed from the oil fields will then be used to supply power plants, helping to reduce Iraq’s power import bill.
As well as supplying to Iraq’s national gas network to generate electricity, the Ratawi gas processing complex will increase the production of gas products, including liquefied petroleum gas (LPG) and condensates.
US-based consultant KBR has performed the front-end engineering and design work on the project.
GGIP projects
TotalEnergies and its partners have made considerable progress with projects for the GGIP scheme, which was formalised between the Iraqi government and investors in September 2021.
The French energy major announced earlier in January that construction of a smaller-scale gas processing plant at the Ratawi field, ArtawiGas25, had started.
This project represents an investment of about $250m, TotalEnergies said, adding that the plant will process 50 million cf/d of gas from previously flared gas at the Ratawi field.
The gas will supply local power plants, meeting the demand of approximately 200,000 households in the Basra region.
The ArtawiGas25 project will be commissioned by the end of this year, and will begin reducing gas flaring before the larger gas processing complex at Ratawi enters operations.
“The innovative modular design of ArtawiGas25 could also pave the way for potential replication across other Iraqi oil fields,” TotalEenrgies said.
ArtawiGas25 will create up to 160 direct and indirect jobs for Iraqi nationals during the construction phase and 30 jobs during the operation phase, the French energy major added.
The other two projects within the GGIP programme are:
- Common seawater supply project (CSSP)
- 1GW solar power project for Iraq’s electricity ministry
TotalEnergies is expanding its activities in Iraq at a time when other international oil companies are reducing their exposure to the country.
In an interview with MEED in October, Cecile Ballantyne Jovene, the head of TotalEnergies’ strategy department for gas, power and renewables, stated that expansion in Iraq is pivotal to the company’s global energy business growth strategy.
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Dubai Municipality has prequalified developers for the first four packages of the $22bn Dubai Strategic Sewerage Tunnels (DSST) project.
According to industry sources, at least three companies have been prequalified as lead members of potential consortiums that can bid for the contracts.
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MEED reported in October that over a dozen companies were keen to prequalify as investors or sponsors of the planned public-private partnership (PPP) project.
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The request for proposals for the project's first two packages is expected to be issued imminently.
MEED previously reported that the bidders for the PPP packages will be prequalified consortiums comprised of sponsors or investors, EPC contractors, and operations and maintenance contractors.
The overall project will require a capital expenditure of about AED30bn ($8bn), while the whole-life cost over the full concession terms of the entire project is estimated to reach AED80bn.
The investor prequalification process for the scheme comes after the client prequalified EPC contractors that can partner with the developers or investors to bid for the contracts.
MEED understands that packages J1 and W will be tendered together as separate contracts first, followed by J2 and J3, with the requests for proposals to be issued sequentially, staggered about six to 12 months apart.
DSST packages
Under the current plan, the $22bn DSST project is broken down into six packages, which will be tendered as PPP packages with concession periods lasting between 25 and 35 years.
The first package, J1, comprises Jebel Ali tunnels (North) and terminal pump stations (TPS). The tunnels will extend approximately 42 kilometres (km), and the links will extend 10km.
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J1, J2, W and J3 will comprise the deep sewerage tunnels, links and TPS (TLT) components of the overall project.
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The project’s remaining two packages entail expanding and upgrading the Jebel Ali and Warsan sewage treatment plants. MEED understands that these packages will be procured at a later stage.
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Iraq and GE Vernova complete plants upgrade
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US-headquartered energy technology provider GE Vernova has completed the upgrades of “several key” power plants in Iraq.
The firm and the Iraqi Ministry of Electricity (MoE) announced the upgrade’s completion on 5 February.
The overall upgrade project, which GE Vernova previously announced, covers 46 gas turbines across 12 power plants, adding up to 500MW to Iraq’s national grid before the summer of 2025.
They did not specify which power plants have completed upgrade works.
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Following frenzied announcements of multibillion-dollar integrated green hydrogen and ammonia plants in the Middle East and North Africa region, particularly Egypt, Morocco, Oman and the UAE, between 2021 and 2023, it appears that key stakeholders have started coming to grips with reality.
Of the close to 80 green hydrogen projects that MEED and MEED Projects track, only three have so far signed an offtake agreement, and only one has managed to reach financial close.
The $8.4bn Neom green hydrogen project in Saudi Arabia reached financial close in March 2023, nearly two years after it was announced.
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The potential storage capacity of the salt caverns for green hydrogen can only be determined once the feasibility study is completed.
Photo credit: Shutterstock
Underground salt caverns offer an option for the bulk storage of very large amounts of gaseous hydrogen.
According to Ireland-headquartered chemicals firm Linde, which operates the world’s first commercial hydrogen high-purity cavern in Texas, the gas has to be purified and compressed before it can be injected into a cavern.
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First green ammonia project
Rachidi also said that Moroccan phosphate specialist OCP is in the advanced stages of studying a project to produce 1 million tonnes of green ammonia annually by 2027.
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It will also include an electrolyser plant with a capacity of 2,000MW.
At least seven other green hydrogen or ammonia projects are under study or in the pre-front-end engineering and design stage in the North African state.
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A year earlier, Serbia-headquartered renewables developer and investor CWP Global appointed US firm Bechtel to support the development of large-scale green hydrogen and ammonia facilities in Morocco and Mauritania.
The Amun green hydrogen project, which CWP Global plans to develop in Morocco, is understood to require 15GW of renewable energy and has an estimated budget of between $18bn and $20bn.
Morocco established a National Hydrogen Commission in 2019 and published a green hydrogen roadmap in 2021.
The roadmap entails the production of green hydrogen for local ammonia production and export between 2020 and 2030; the production and export of green hydrogen, green ammonia and synthetic fuels between 2030 and 2040; and the global trade of these products between 2040 and 2050.
Main photo: For illustrative purposes only (Adnoc)
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