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.
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Iraq oil exports drop by 89% in April
20 May 2026
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Iraq exported 10 million barrels of crude in April, an 89% drop compared to the 93 million barrels that were exported the month before the Iran conflict, according to the country’s new Oil Minister, Basim Mohammed Khudair.
Oil exports generated just over $1bn in April, down from $6bn in February, according to a separate statement from the ministry.
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Iraq risks defaulting on payments for $10bn oil project
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Iraq’s state-owned upstream operator Basra Oil Company (BOC) risks defaulting on payments for the $27bn Gas Growth Integrated Project (GGIP) due to fallout from the US and Israel’s war with Iran.
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GGIP masterplan
The GGIP programme is focused on developing four major projects in Iraq.
These are:
- The Common Seawater Supply Project (CSSP)
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- A field development project at Ratawi, known as the Associated Gas Upstream Project (AGUP)
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China Petroleum Engineering & Construction Corporation (CPECC) won a $1.61bn contract in May to execute engineering, procurement and construction (EPC) work for the gas processing complex at the Ratawi field development.
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Contractors submit best offers for major Adnoc Onshore project
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Contractors have submitted revised commercial offers to Adnoc Onshore, a subsidiary of Abu Dhabi National Oil Company (Adnoc Group), for a project involving the tie-in of several wells in the Bab and North East Bab oil field developments in Abu Dhabi.
Located 84 kilometres southwest of the city of Abu Dhabi, the Bab field has been in production since 1960 and is the emirate’s first oil-producing asset. The North East Bab cluster comprises the Al-Nouf, Rumaitha and Shanayel fields.
The One Tie-In project at the Bab and North East Bab field developments is integral to Adnoc Onshore’s contribution to its parent company Adnoc Group’s objective of achieving an oil production capacity of 5 million barrels a day (b/d) by 2027 – a campaign known as Accelerated Integrated Programme 5. The Abu Dhabi energy giant currently has a spare capacity of 4.85 million b/d.
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- Target Engineering Construction Company (UAE)
Adnoc Onshore is understood to have started the tendering process for the Bab and North East Bab One Tie-In project last year, with contractors submitting technical and commercial bids this year.
Following the evaluation of bids, Adnoc Onshore sought best commercial offers from the bidders, which contractors submitted earlier in May, sources told MEED.
Adnoc Onshore’s budget for the project is estimated to be $1.2bn, according to sources.
The broad scope of work on the project covers residual engineering, procurement of any material not part of free issued material, construction, site survey, installation, inspection and testing, pre-commissioning and commissioning support, to include new wellsite facilities, including a new mini-pad, well bay and cluster at the Bab and North East Bab field developments.
Adnoc Onshore has divided the scope of work on the Bab and North East Bab One Tie-In project into 18 packages, which are as follows:
Bab asset
Package 1:
Off-pad – Demolition and construction of existing oil producing wells as per high hydrogen sulphide (H2S) standard package.
Package 2:
Off-pad – Construction of new oil producing wells as per high H2S standard package.
Package 3:
On-pad – Demolition and construction of existing oil producing wells as per high H2S standard package.
Package 4:
On-pad – Construction of new oil producing wells as per high H2S standard package.
Package 5:
On-pad – Construction of facilities at mini-pad, pad or well bay for tie-in new oil producing wells as per high H2S standard package.
Package 6:
Off-pad – Construction of new oil producing wells (low H2S) as per standard package.
Package 7:
- Construction of water supply, disposal and injection wells as per standard package;
- Construction of off-pad water injection wells;
- Construction of on-pad water injection wells and water injection manifold.
Package 8:
Off-Pad – Digitalisation of existing wells.
Package 17:
- Well bay: On-pad wells, flowline, common facilities (PSS, CI skid, WHCP), overhead line;
- Mini-pad: On-pad wells, transfer line, blow down header, common facilities (PSS, manifold-OIL, MPFM, CI SKID, WHCP, drain oil network, pig launcher, receiver, potable water system), overhead line;
- Off-pad: Gas lift oil producer well;
- On-pad: Gas lift oil producer;
- Electrical submersible pump (ESP) well: on-pad;
- ESP well: off-pad.
North East Bab asset
Package 9:
Cluster-based – Construction of new oil producing wells at Al-Nouf.
Package 10:
Cluster-based – Construction of new water alternating gas (WAG) injection wells at Al-Nouf.
Package 11:
Remote – Construction of oil producing wells.
Package 12:
Remote – Construction of WAG wells.
Package 13:
Cluster-based – Construction of oil producing wells at Rumaitha and Shanayel.
Package 14:
Cluster-based – Construction of WAG wells at Rumaitha and Shanayel.
Package 15:
Cluster-based – Construction and/or modifications of oil production/test manifold, gas injection/gas test manifold, let down gas manifold well head control panel, gas supply connection for injection, gas supply connection for gas lift. Chemical injection skid, water injection manifold, maintenance flare package. Installation of new pig traps, installation of hot tap and extension of cluster plot.
Package 18:
- Al-Nouf cluster: Common facilities (ETR, ITR, vent stack, overhead line, oil manifold, test manifold, gas lift manifold, drain oil tank, common pipe rack, etc.), gas lift oil producer wells, WAG injection wells;
- Rumaitha cluster: Common facilities (ETR, ITR, vent stack, overhead line, oil manifold, test manifold, gas lift manifold, drain oil tank, common pipe rack, etc.), gas lift oil producer wells, WAG injection wells.
Bu Hasa asset
Package 16:
Off-pad – Digitalisation of existing wells.
Adnoc Onshore is Adnoc Group’s largest oil-producing subsidiary, accounting for 2 million b/d and about 7 billion cubic feet a day of associated gas production from four main onshore hydrocarbons field developments in Abu Dhabi – namely Bab, Bu Hasa, North East Bab and South East.
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Majid Al-Futtaim to develop $17bn Dubai South community
19 May 2026
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Dubai-based developer Majid Al-Futtaim has signed an agreement with Dubai South to develop a AED62bn ($17bn) mixed-use community in the Dubai South area of the city.
The 22-million-square-foot development will include residential and retail components, anchored by a shopping mall.
Further project details and a construction timeline have yet to be disclosed.
In October last year, Majid Al-Futtaim announced new investments in Saudi Arabia and the UAE.
It signed an agreement with Saudi gigaproject developer Diriyah Company to introduce a Vox Cinemas multiplex and seven retail brands to Diriyah Square, part of the Diriyah project in Riyadh.
The retail outlets will cover approximately 5,534 square metres (sq m), while Vox Cinemas will occupy about 7,632 sq m.
The developer will bring international brands to Diriyah, including Shiseido, Lululemon, Crate & Barrel, Abercrombie & Fitch, AllSaints, CB2 and Hollister.
In Dubai, Majid Al-Futtaim also announced plans to launch Ghaf Woods Mall within its Ghaf Woods residential community in Dubailand.
According to an official statement, once completed, Ghaf Woods Mall will be the 30th mall in the developer’s portfolio and its 19th in the UAE.
In April last year, Majid Al-Futtaim revealed plans to develop a mixed-use project in Riyadh at an estimated cost of about SR17.5bn ($4.6bn).
According to media reports, the development will cover an area of 850,000 sq m and will include residential, commercial, office and entertainment components.
In the same month, the firm said that it will invest AED5bn ($1.4bn) to upgrade Dubai’s Mall of the Emirates with new retail, dining, wellness and entertainment facilities.
According to an official statement, the 20,000 sq m expansion will add 100 new stores.
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