In 2014, the Baiji plant was destroyed at the hands of Islamic State militants.
Prominent Qatari construction company UrbaCon Trading & Contracting Co. has submitted a substantial bid to rebuild a 2.1 gigawatt thermal power plant in the northern regions of Iraq.
With six separate units, the project is set to supply power to the provinces of Anbar, Salahuddin, Nineveh, and Kirkuk, as detailed in a statement by Iraq’s electricity ministry.
In 2014, the Baiji plant was destroyed at the hands of Islamic State militants.
The reconstruction is anticipated to span a minimum of three years and could cost around $2 billion, as disclosed by an official from the ministry, who opted to remain anonymous, citing a lack of authorisation to communicate with the media.
Qatar and Iraq
The establishment of a collaborative committee to explore the potential importation of gas from Qatar and Turkmenistan was set in motion back in August 2023, the Iraqi Ministry of Electricity announced.
Iraq’s Minister of Electricity Ziyad Ali Fadel said the government took decisive actions and formed a committee composed of officials from the Ministry of Oil and advisers from the Ministry of Electricity.
Their objective is to negotiate gas agreements with Qatar and Turkmenistan, he told the Iraqi News Agency at the time.
The gas imports are used to fuel power plants located in central and southern Iraq, generating approximately 7,000 megawatts daily.
In July 2023, the official revealed that the drop in electricity supply was due to the suspension of gas imports from Iran, leading to a loss of 6,000 megawatts that could have been generated by power plants if the necessary fuel had been available.
Iraq’s Prime Minister Mohammed Shia Al Sudani then directed his government to seek alternatives to Iranian gas imports, pointing to countries like Qatar and Turkmenistan as alternatives.
The statement came amid challenges in sourcing the requisite fuel for the country’s power plants, thereby risking power production.
However, Al Sudani voiced concerns over the impact of US sanctions and non-adherence to the gas dues payment mechanism, established in 2018, on the import of gas from Iran. These factors have culminated in a significant reduction of 50% in gas supplies from the neighbouring nation, exerting pressure on Iraq’s power production capacities.
During a meeting with energy sector officials, Al Sudani emphasised that the current government had taken steps to achieve a historic electric power production level of 26,000 megawatts. However, sustaining this output relied on the continuity of Iranian gas supplies.
Investments in Iraq
Qatar and United States-based companies held talks with Iraq to invest in its untapped gas industry in July 2023, as Baghdad actively pursued plans to develop its resources, according to the undersecretary of Iraq’s oil ministry, Bassim Khudair.
Khudair said that there are intentions to offer additional concession areas to foreign companies to develop gas deposits, which are estimated to be around four trillion cubic metres, as reported by Reuters.
He further outlined plans by Iraq to boost its oil and gas production capacity by granting more projects to international companies.
Both Qatari and US firms have submitted technical and commercial offers and expressed interest in investing in Iraq’s gas sector.
The Iraqi ministry is also engaged in negotiations with the Saudi oil giant Aramco regarding an agreement signed in May 2023 for the development of the Akkas gas field.
In June last year, three Qatari companies and Iraq’s National Investment Commission agreed to develop $9.5 billion in projects in Iraq, including the construction of two power plants with a combined capacity of 2,400 megawatts.
The power plants intend to help Iraq reduce its reliance on neighbouring Iran for energy.
Iraq imports electricity and gas from Iran, accounting for an estimated 40% of its power supply. This is especially important during the hot summer months when temperatures can reach 50 degrees Celsius and power consumption soars.
Qatar’s Amir Sheikh Tamim bin Hamad Al Thani visited Iraq in June last year and announced plans to invest $5 billion in various sectors in Iraq over the next few years.
The Amir’s visit to Iraq was his first since 2021 and came months after Iraqi Prime Minister Mohammed Shia Al Sudani assumed his position.
Since June 2023, Iraq has been benefiting from the electrical interconnection project with Gulf countries to address a shortage caused by the decrease in Iranian gas supplies.
