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GCC grid and Iraq sign electricity contract

10 October 2024

Saudi Arabia Eastern Region deputy governor Prince Saud Bin Bandar Bin Abdulaziz has witnessed the signing of a contract to implement the project to connect the Gulf electricity market with Iraq.

Prince Saud also inaugurated the project to upgrade the control centre systems of the GCC Interconnection Authority (GCCIA) in Dammam, the Saudi Press Agency reported on 9 October.

According to an industry source, the electricity tariff appears to have been finalised or signed, although this has not been formally disclosed.

"I doubt it will be less than $c10 a kilowatt-hour," the source said.

GCCIA chief executive Ahmed Al-Ebrahim and Gulf Laboratory CEO Saleh Al-Omari attended the contract signing ceremony in Dammam.  

The updated control centre systems of the electricity interconnection network aims to "improve the efficiency and flexibility of electricity systems to be able to face potential challenges".

Prince Saud inaugurated the so-called Gulf electricity market project in October last year.

The platform is expected to enable Iraq to exchange and trade electricity with the GCC countries collectively, separately or individually.

At the time, the Eastern Region governor's office said: "The GCCIA will replace the current electricity market management system with a new one that aligns with the new phase, enabling it to respond effectively to the ongoing market developments and achieve the specific goals and needs of the GCCIA in connecting the GCC countries with Iraq."

In February last year, GCCIA confirmed the award of five contracts worth $220m for the construction of infrastructure linking the region’s electricity grid with Iraq’s.

The project involves the construction of a double-circuit 400-kilovolt (kV) transmission line from the Wafra station in Kuwait to the Al-Faw station in south Iraq with a total transmission capacity of 1,800MW and a length of 295 kilometres.

To be completed within 24 months, the project’s first stage is expected to supply Iraq with 500MW of electricity, the GCCIA added.

The contracts were signed with:

  • KEC International (local)
  • Kalpataru Power Transmission (India)
  • Calik Enerji (Turkey)
  • Cegelec Saudi Arabia (local/France)
  • National Contracting Company (NCC)

The following month, GCCIA awarded Japan’s Hitachi Energy a contract to upgrade the Al-Fadhili high-voltage direct current (HVDC) converter station in Saudi Arabia.

Once upgraded, the Al-Fadhili station will be able to exchange up to 1,800MW of electricity between the six states.

The GCC regional grid extends over 1,000km from Kuwait to Oman.

Al-Ebrahim said that the project has contributed to saving some $3.6bn; the investment and operating costs of the project since its establishment amounted to about $1.5bn.

He said that the contract with Iraq will contribute to higher energy security, and enable the GCC countries to supply Iraq with about 3.94 terawatt-hours a year by 2025, at prices lower than the cost of local production, which will help Iraq reduce public spending.

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Jennifer Aguinaldo

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