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Siemens Energy and the Ministry of Electricity of the Republic of Iraq signed a contract to construct Iraq's West Mosul 400-kilovolt (kV) super grid station, which will provide reliable and efficient power supply to around 700,000 Iraqi citizens in northern Iraq, particularly the Nineveh province.

The construction of the Mosul station, which was destroyed in 2014, will help ensure stability in the transmission of power supply to the covered areas, coupled with a reduction in power losses.

The newly built 400-kV station will supply approximately 30 stations with voltage levels of 132-kV, thereby helping to tackle the severe shortage of power supply in the Nineveh province.

Eng. Khalid Ghazay Attia, Director General, Electricity Transmission Company, Northern Region, Iraq, said:

"Strengthening the national grid and scaling up its stability is a focal priority for us as demand for power in Iraq increases due to a growing population and to support industries and development projects in the country.

"The new Mosul station aims to bring predictable power to support the reconstruction and rebuilding of the Nineveh Governorate, recovering now from years of war. We're already working on comprehensive grid projects across the country in collaboration with international partners, like Siemens Energy, to deploy the most reliable and advanced technologies."

The project will be financed by the German state-owned development bank KfW.

Mahmoud Hanafy, Vice President, Grid Stabilization, Middle East, said:

"We're proud to support the Iraqi national grid with our latest technologies. The new project comes at a significantly important time for Nineveh province.

"In addition to this project, we're working relentlessly on the installation of more than 14 stations across Iraq. Just recently, we delivered 35 high voltage transformers to the Ministry of Electricity as part of Siemens Energy's Roadmap for Iraq."

For the West Mosul project, Siemens Energy's scope of work includes the design, equipment manufacturing, construction, site delivery, erection, testing and commissioning for the turnkey 400/132/11kV substation project together with the supply of 13 auto transformers.

In 2019 Siemens and the Ministry of Electricity of the Republic of Iraq signed an implementation agreement to kick off the execution of the Iraq Roadmap which includes the addition of new and highly efficient power generation capacity, rehabilitation and upgrade of existing plants and the expansion of transmission and distribution networks.

(Source: Siemens)

Dana Gas and its partner Crescent Petroleum have announced the full resumption of the expansion project at the Khor Mor field in the Kurdistan Region of Iraq (KRI), which the companies jointly operate on behalf of the Pearl Petroleum consortium.

The KM250 expansion involves further investment of US$600 million to add 250 million cubic feet per day of much-needed additional gas production to supply the local power stations. The project construction work had been put on hold due to the COVID pandemic but is now on track for a new target start date of April 2023, after agreement to lift the force majeure with both the Kurdistan Regional Government (KRG) and the contractor [Exterran].

Under a Gas Sales agreement signed in March 2019 with the KRG Ministry of Natural Resources, Pearl Petroleum will sell the additional quantities of gas to supply the power stations with affordable and environmentally cleaner fuel, and further enhance electricity supplies. Today over 80% of the KRI's electricity generation is enabled by the gas produced by the companies.

Current production at the Khor Mor field is 440 million cubic feet per day of natural gas as well as 15,700 barrels per day of condensate and 1,020 tonnes of liquified petroleum gas (LPG), or a total of 110,400 barrels of oil equivalent (boe) per day, making it the largest overall producer in the KRI and the largest private sector upstream gas operation in Iraq. After the KM250 train, there are plans to add a further KM500 train which would take production to almost 1 billion cubic feet per day by 2024.

Total investment to date exceeds US$2 billion with total cumulative production of over 332 million barrels of oil equivalent (boe), which has resulted in significant fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole. In addition 43 million tonnes of CO2 emissions have been eliminated by displacing liquid fuels, which in turn has made a positive contribution to tackling global climate change as well as reducing local air pollution.

Mr. Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:

"After a year of delay due to the COVID pandemic, we are pleased to fully resume the KM250 expansion project to invest US$600 million and grow the gas production almost 60% within 2 years from now, supporting the local electricity provision even further. Despite the challenges the whole world has faced over the past year we have kept our operations safe and managed to grow production and we are grateful to all our staff and to the KRG for its support."

Dr. Patrick Allman-Ward, CEO of Dana Gas, added:

"With our partners in Pearl Petroleum we are proud to be investing further in the gas sector of the Kurdistan Region of Iraq, delivering a reliable source of cleaner energy, and supporting local economic development. The continuing receipt of payments in a timely manner gives confidence for our continued investment commitment as we enter the next exciting phase of growth with the Khor Mor expansion, which will be carried out under strict health protocols to ensure the safety of our staff and service providers."

(Source: Dana Gas)

By Noam Raydan, for Amwaj Media. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq-Lebanon fuel oil talks remain shrouded in mystery

Despite Lebanon's deepening financial crisis, its politicians remain committed to the same stop-gap measures that have crippled the country's dilapidated electricity sector. Lebanese officials continue to experiment with ad hoc solutions to the power sector, which has long been a drag on the national budget.

Among the more controversial plans is the government's attempt to import fuel oil from Iraq. Aside from its unsuitability for power plants in Lebanon, partly due to its high sulfur content, talks between Baghdad and Beirut over fuel supplies have been fraught with contradictory and factually inaccurate statements.

The full report can be viewed here (registration required).

By John Lee.

The Chinese company Sinopec (China Petroleum & Chemical Corporation) has won a contract to develop the Mansuriyah gas field in Diyala.

The field, near the Iranian border, is expected to produce 300 million standard cubic feet (Mmscf) per day of gas, which will be used for electricity generation.

In 2010, an agreement had been signed for the field to be developed by Turkish Petroleum (TPAO) (37.5%), Iraqi Oil Exploration Company (25%), Kuwait Energy (KEC) (22.5%), and Kogas (15%). This consortium stopped development in 2014 due to security concerns, and the agreement was reportedly cancelled in 2020.

Under the new 25-year deal agreed on Tuesday, Sinopec will have a 49-percent interest in the field, with Iraq's state-owned Midland [Middle, Central] Oil Company having 51 percent.

The contract may be extended for an additional five years.

According to the Ministry of Oil, Sinopec's bid was he lowest submitted.

(Source: Ministry of Oil)

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq and the China-Iran Comprehensive Cooperation Program

The China-Iran Comprehensive Cooperation Program (CICCP) was signed on 27 March 2021; two days later the CICCP's direct impacts on Iraq began emerging and one of such impacts seems to benefits both Iraq and Iran!!

A few days ago I completed a detailed preliminary assessment of CICCP document. The assessment was written in Arabic entitled "China-Iran Comprehensive Cooperation Program: Tactically Important Strategically Impacting if Implemented", it was circulated widely and posted on many websites.

The assessment uses composite methodology of three researches approaches (Text analysis, SCOR (Strength, Challenges; Opportunities and Requirements) and facts/evidence based) and comprises an introduction, three parts and concluding remarks. Part one provide brief review of CICCP document structure: preamble, articles, annexes, effective date and term of the deal, coordinating and supervising authorities. Part two, provides detailed assessment of eight fundamental topics/ areas of cooperation, from the perspectives of the political economy of bilateral relations and geopolitical considerations. Part three provides the direct official reactions to CICCP from Iraq, USA, Arab Gulf States/Saudi Arabia and Russia.

The political economy perspectives are related to the following basic issues: The first relates to the nature of bilateral relations in terms of sovereign independence or dependency and hegemony; the second is whether the principle of "mutually beneficial" is also equitable; the third concerns the structuring of the Iranian economy on whether the deal will eventually deepens the dependence on the export of raw materials, oil and gas, or introduces the required and desirable structural changes horizontal, vertical and knowledge-based levels; and the fourth is about the financial and banking independence, monetary and currency issues pertaining to funding investments and trade exchange.

The geopolitical considerations were addressed at four levels, starting from the domestic (national for both countries), continental (Asian from China to Syria), regional (West Asia / Middle East) and international levels.

The assessment argues that the timing of signing and announcing CICCP is tactically motivated and important, while its proper and timely implementation could be a game-changer and thus strategically impacting; but, as usual, reality seldom coincides with expectations.

This brief intervention focuses on the direct current evidenced impacts on Iraq. Interested readers are kindly invited to read the Arabic version of my detailed initial assessment through the web-links mentioned at the end of this article.

In a remarkable speed and substance CICCP has already prompted both Iraq and the US to react!

First; after the current prime minister, Mustafa al-Kadhimi, denied, rather harshly, in a press conference on November 18, 2020, the existence of an Iraq-China agreement by saying, 'You know there is no China agreement, why are you promoting these lies?', he returned to authorize, on March 30 - that is, only three days after the signing of CICCP, "to start implementing the Chinese agreement"!!

While I do not find it necessary, now, to discuss what has happened between Iraq and China since the government of Haider al-Abadi, I find it useful to remember the statement by the Prime Minister's Financial Affairs Adviser, Dr. Modhir Muhammad Saleh, on March 29, 2021, that the "Iraq-China agreement" became effective on October 18, 2020, and then he affirmed the "cooperation framework agreement ... and the final accounting and oil annexes were signed on September 23, 2019." So why has not been published to this day any official document on this agreement / cooperation framework agreement, nor any of its annexes or memoranda of cooperation/ understanding related to it!!??

But there is a document at the Ministry of Finance entitled "Export Credit Insurance Cooperation Framework" between the China Export & Credit  Insurance Corporation and the Iraqi Ministry of Finance) dating back to May 11, 2018 (that is, before the date of the agreement signed by former Prime Minister Adel Abdul Mahdi) !!!!

It is worth mentioning that 2021 State Budget Law includes a few infrastructure projects worth 1.803 trillion Iraq Dinnar to be funded, presumably by the above mentioned 2018 framework; since there is no new framework agreement officially published by the Ministry of Finance, nor approved by the Council of Ministers, nor legislated by the House of Representatives/ the Parliament. Moreover, even if such agreement is ratified and activated it utilization will be differed to future state budget for 2022 or even 2023 because of the national election scheduled for October this year.

Apparently, CICCP was a wakeup call for the Iraqi government but it is in reality too late for 2021 budget funding.

But on the other hand, the Iraqi Premier rushed for quick visits to Saudi Arabia and the UAE, immediately after signing CICCP; is there a relationship between the two events? Time will only tell!!!!

Second, among direct reactions by the US administration and as far as Iraq is concerned relates to Iraq-Iran interests. Just two days after signing the CICCP the U.S. renewed and extended the Iraqi exemption from the practices of maximum US pressure on Iran from 45 to 120 days; a waiver to avoid penalties for buying natural gas and electricity from Iran. This exception entails two positive consequences for both Iraq and Iran: the first is to ensure the continued supply of Iranian gas to generates electricity; this what the Iraqis suffer from its shortages especially the heated summer is on the doorstep, and the second is that Iraq pays Iran's accumulated dues for importing gas and electric power (which constitutes about a third Iraq's production of electricity) as the total of those receivables were mentioned in the 2021 budget, about 1688 billion Iraqi dinars.

Third, another important reaction by the US administration was its quick decision to hold a new round of strategic dialogue with Iraq; the discussions began on April 7, and mainly relate to the issue of US forces remaining in Iraq and the Strategic Framework Agreement signed in December 2008. (This agreement and related matters face strong opposition and many important, influential, legal and judicial challenges, especially after the Trump administration assassinated two leading heavy weight individuals, Abu Mahdi Al-Muhandis (Iraq) and General Qassem Soleimani (Iran), on January 3, 2021 near Baghdad airport).

It is worth noting that energy cooperation is one of the eight topics included in the said strategic framework agreement. Evidence suggests that the previous round of the Iraqi-American Committee for the Coordination of Cooperation in the Field of Energy, which was held, virtually remotely, on January 18 of this year was brief and did not include any important issues or noticeable impacts or new achievements. Hence, it did not attract attention from domestic or external media. Even the two ministries, i.e, Oil and Electricity, that should be directly involved, hardly mentioned anything on their websites on that latest meeting. Will CICCP invigorate Iraqi-American cooperation for the benefit of the energy sector in Iraq?? Who knows, will see!!!

Click here to download the full report in pdf format.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq's Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad's biography here.

Iraqi Ministry of Finance and GE Mark Financial Close of Power Up Plan

The Iraqi Ministry of Finance (MoF), GE and their financial partners have celebrated the financial close -- a critical milestone that marks the final step of a loan agreement becoming effective -- of the Power Up Plan 4 (PUP4).

Under PUP4, GE will provide capital and spare parts, repairs and services to the Qudus, Khairat, Baghdad South, Hilla, Mussayab, Haidariya and Karbala power plants to help maintain more reliable generation of up to 2.7 gigawatts (GW) of electricity for the Iraqi people.

As part of these efforts, 20 gas turbines that are currently not operational at these sites will also be returned to service. GE played a key role in bringing the Iraqi Ministries of Finance, Electricity and Planning together with various financial institutions, including export credit agencies, commercial banks and others, to secure financing for the project.

H.E. Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade and Deputy Chairman of Etihad Credit Insurance (ECI) Board of Directors said:

"Open economies, trade and public private partnerships can play a strong role in supporting countries to develop critical infrastructure. This is highlighted by the Power Up Plan 4, for which certain key services will be executed in and exported from GE's facilities in the UAE, allowing us the opportunity to extend financial support through Etihad Credit Insurance and providing a win-win scenario for all. It also reflects the vision of our leadership to broaden regional collaborations that can help enhance the quality of life of people across the Middle East and beyond."

Mudaffar Al-Jbori, Ambassador of Iraq to the UAE, said:

"The recent visit of Iraqi Prime Minister Mustafa Al Kadhimi has further strengthened bilateral ties between the two countries. There is also a renewed focus by the UAE to invest in Iraq and support the country's socio-economic progress. The support by ECI to PUP4 is another example of the partnership between the two nations and will further accelerate Iraq's electricity infrastructure development."

Mr. Khaled Murad, the Director General of Public Debt at the Iraqi Ministry of Finance said:

"Electricity is the foundation that modern life is built on. The financing secured through the support of GE and other partners will ensure more seamless operations at key power plants in Iraq, helping us to make better use of existing assets and to provide the electricity that people depend on to run their homes and businesses. Looking ahead, there remains plenty of opportunity to enhance Iraq's power sector through further large-scale investments, and we look forward to continue to focus on developing such valuable collaborations in the future."

GE is bringing the strength of its global network to support the execution of PUP4. Several key repair works for equipment such as Gas turbines will be undertaken at GE's service centre in Jebel Ali Free Zone, Dubai, UAE. This has been facilitated by ECI, the UAE's Federal export credit company, which supports projects that promote economic diversification in the UAE and reduce the dependence on oil resources as a source of income.

ECI is one of the debt reinsurers for PUP4, providing insurance coverage to the lender, JP Morgan. PUP4 is the first Iraqi project supported by ECI and opens the doors to further collaborations between the UAE and Iraq.

"Etihad Credit Insurance is committed to delivering the vision of the UAE's leadership to drive sustainable and diversified economic development. As part of these efforts, we are honored to extend our support to finance a project in Iraq for the first time, a strong statement on the regional partnerships that we continue to build. We look forward to continue evaluating opportunities for future partnerships in Iraq," said Massimo Falcioni, CEO of ECI.

GE has supported the development of Iraq's energy infrastructure for over 50 years. In the north, GE's teams helped power liberated areas with the rehabilitation of Mosul's Al Qayara Power Plant. In central Iraq, the company is helping to equip, operate and maintain the country's largest combined cycle power plant - the Besmaya Power Station.

In the south, GE's Advanced Gas Path upgrade solution has enabled the Ministry of Electricity to decrease the downtime of gas turbines, improve availability, enhance performance and lower annual maintenance costs at the Najibiya Power Plant.

"Working closely with the Iraqi Ministries of Finance, Electricity and Planning, GE has collaborated with various private and public financial institutions from around the world to help secure over US $2.4 billion in financing since 2015 for energy sector projects across the country," said Joseph Anis, President & CEO of GE Gas Power Europe, Middle East and Africa. "We remain committed to continuing to facilitate investments from various institutions, provide industry-leading technologies and work with our team of local professionals on-the-ground, to deliver results that strengthen Iraq's power sector further and drive growth and prosperity for everyone, no matter how challenging the circumstances."

In addition to strengthening critical infrastructure, GE also supports several local community development projects across Iraq. The company has partnered with Kapita, a grassroots entrepreneurship organization, to launch the 'Iraqi Microbusinesses' initiative - 'Taqat' in Arabic.

Through the partnership, GE will support up to 50 microbusinesses owned by young Iraqis to scale up further by providing grants, marketing and business training. GE also recently announced a program to strengthen the skills of young Iraqis by providing scholarships for five Baghdad Business School students for a 10-month educational program.

(Source: Etihad Credit Insurance)

By Noam Raydan and Harry Istepanian, for Amwaj Media. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Despite scorching heat, solar power remains mirage in Iraq

Iraq has suffered from a lack of electricity generation capacity following the US-led invasion of 2003 as well as the rise and fall of the Islamic State group (IS) over 2014-17.

Successive governments have thus far failed to rehabilitate Iraq's electricity sector, despite spending some 50B USD on it in the first 16 years after the invasion.

In the absence of robust regulatory frameworks and action plans, the country's electricity sector is loaded with investment plans that can be described as ambitious at best and outlandish at worst.

Among these plans is a previous renewable energy project that resurfaced last month.

The full report can be viewed here (registration required).

This report provides a general overview of the Iraqi electricity sector.

It gives a glimpse of the electricity infrastructure starting with electricity generation, transmission, and distribution in Iraq.

This publication is part of Business LANDSCAPE series which a series of research publication aims to highlight the current situation of Iraq's economy and private sector through publishing researches and data and make it freely available for the benefit of investors, and the local and international community.

This study is published in partnership with German Government via the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

Click here to download the full report.

(Source: Kapita, in partnership with GIZ)

Pope Francis' historic visit to Iraq highlights remaining needs in areas liberated from ISIL

The historic visit of His Holiness Pope Francis to Iraq is testament to the strength of the Iraqi people in rebuilding their lives post ISIL, but also highlights the urgent, basic remaining needs of 1.2 million Iraqis still displaced from the conflict, says the United Nations Development Programme (UNDP) in Iraq.

As the biggest implementer of rehabilitation and stabilization activities in the country, UNDP Iraq has estimated US $660 million is still required to cover Iraq's basic needs, with almost 70% of that apportioned to the Ninewa governorate which was one of the locations of the Pope's visit and encompasses Iraq's historical city of Mosul as well as the Ninewa Plains, home to Iraq's many religious minorities.

"His Holiness Pope Francis' historic, long-awaited visit to Iraq - and in particular - his visit to areas like Mosul that were ravaged by ISIL, is a significant marker of peace, hope and unity for the Iraqi people," says Resident Representative of UNDP Iraq, Zena Ali Ahmad.

"It is also an opportunity to shine a spotlight on the critical remaining needs of Iraqis across the five liberated areas. These urgent needs must be addressed to allow Iraq's sustainable recovery from one of the most brutal conflicts in the country's recent history-paving the way towards durable solutions in Iraq.

"It's been three years since Iraq was officially liberated from ISIL, and while there has been many achievements in bringing more than 4.6m Iraqis home, we cannot forget about the 1.2 million people who remain the 'hardest to return', or ignore the remaining needs like water, electricity, housing and healthcare of all Iraqis who have suffered from the conflict, " she says.

To date, with generous support from the international community and the Government of Iraq, UNDP has implemented more than 2,700 stabilization projects in Iraq, which include the restoration of basic infrastructure and services, as well as short term employment opportunities, local capacity strengthening and social cohesion activities, benefiting more than 11 million Iraqis.

In Mosul alone, where daily life has resumed for many communities, UNDP Iraq, through its partners have restored more than 7,000 houses, 147 schools, 46 university buildings, 8 water treatment plants, 39 electricity networks, and one major hospital, with another 5 underway.

Collectively, these efforts have benefited 5.5 million Moslawis. UNDP has a strong presence in areas populated by religious minority groups, having completed more than 500 projects in locations such as Al Qosh, Bartela, Bashiqa, Batnaya, Hamdaniya, Karamless, Telesqof, Sinjar and Sinuni.

(Source: UNDP)

By John Lee.

Oil Minister Ihssan Abdul-Jabbar Ismail has given further details of the seven "alternative energy" plants that will be built, clarifying that they will all be solar power plants.

The projects will have a combined capacity of 750MW, with the largest being a 300-MW facility in Karbala.

There will also be plants in Wasit and Babil, and two sites in Muthanna -- Sawa-1 and Sawa-2.

The Minister said that Iraq plans to reach 10GW of solar electricity production by 2030, which appears to contradict his statement last week in which he targetted 20GW of solar by 2030.

He added that Iraq is in talks with international companies, including Norwegian companies, and the French company Total, to implement a number of important projects in this area.

(Source: Ministry of Oil)