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TotalEnergies holds Iraq solar contractor talks

28 August 2023

French energy major TotalEnergies has been holding discussions with multiple engineering, procurement and construction (EPC) contractors for the 1,000MW solar photovoltaic (PV) power plant it plans to develop in southern Iraq as part of its $27bn energy project with the Iraqi government.

“Discussions with EPC contractors, including China-based companies, are ongoing,” a source close to the project tells MEED.

The French energy company has activated its four contracts under the $27bn scheme, starting 16 August this year, said Basra Oil Company director general Bassim Abdul Karim al-Shamkhani, according to a report by the Iraq News Agency on 27 August.

In addition to the solar PV independent power project (IPP), the three main projects that make up the $27bn deal include:

  • A treatment facility for associated natural gas from five southern oil fields – West Qurna 2, Majnoon, Artawi (also known as Ratawi), Tuba and Luhais
  • The $4bn common seawater supply project 
  • Development of the Artawi field 
Solar IPP

Iraq's Electricity Ministry has approved the solar project, which will be Iraq’s first solar IPP, as MEED previously reported.

The levelised electricity cost for the project, to be located in the Artawi oil field in Basra, is 3.5 $cents a kilowatt-hour ($c/kWh).

“That price is comparatively high, but reasonable if you take Iraq’s conditions,” a source told MEED in June.

Neither the Electricity Ministry nor the French energy giant has confirmed the tariff for the project.

TotalEnergies said previously that it had invited Saudi utility company Acwa Power to join the project, without providing further details.

Acwa Power has declined to confirm its participation in the project.  

Delayed project

The planned 1,000MW solar project in Basra is expected to supply electricity to the Basra regional grid. 

On 5 April, TotalEnergies confirmed it had reached an agreement with the Iraqi government on the $27bn energy project.

The breakthrough in negotiations came after the Iraqi government agreed to take a 30 per cent stake in the project, instead of the 40 per cent stake it had previously required.

TotalEnergies said it would own a 45 per cent stake, with QatarEnergy holding the remaining 25 per cent.

The deal was originally signed in 2021 and involves TotalEnergies developing four energy projects with an initial investment of $10bn in southern Iraq over 25 years.

The project is part of the Gas Growth Integrated Project (GGIP), which aims to enhance the development of Iraq’s natural resources and improve the country’s electricity supply.

Iraq is understood to generate about 20,000MW of electricity from existing power plants, which is 10,000MW short of actual domestic demand.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11102504/main.jpg
Jennifer Aguinaldo

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