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GE Power (NYSE: GE) has installed and commissioned a new advanced 9E gas turbine at the Iraqi Ministry of Electricity’s (MoE) Al Qudus Power Plant.

The site was previously capable of generating up to 1,125 megawatts (MW) of power. With the addition of the new turbine, it can generate an additional 125 MW, which will contribute to meeting the higher demand for power during the summer months. GE is also providing maintenance services, parts and rehabilitation works at the site, helping to enhance the reliability of operations at the plant and maintain a stable supply of electricity over the course of the year.

Musaab al-Mudarris, Director of the Media Department of the Iraqi Ministry of Electricity said:

“Delivering additional power for the hot summer months is a priority for the Ministry of Electricity. One of the quickest and most cost-effective means of adding efficient, reliable power to the national grid is to enhance the productivity of existing power generation facilities.

"GE can help us meet this objective with its industry-leading solutions, large installed base of power generation equipment across Iraq and local team of experts. The successful delivery, installation and commissioning of a new gas turbine at Al Qudus Power Plant just 5 months after the contract was awarded is a testament to the Ministry and GE’s joint commitment to powering Iraq.”

GE’s 9E technology is capable of running on more than 50 different kinds of fuel. This provides the MOE with the flexibility to operate the unit on the most economical source available and to keep generating power using liquid fuels when gas is unavailable.

Joseph Anis, President and CEO of GE’s Gas Power Systems and Power Services businesses in the Middle East and South Asia, said:

“GE is committed to delivering reliable, efficient and affordable power to help the Iraqi people strengthen their economy, re-build conflict-affected areas and support progress for present and future generations. Our teams were among the first to enter Mosul after its liberation, helping to rehabilitate the Al Qayara power plant; we are supporting the development of the country’s largest power plant in Baghdad province; and we have facilitated the Ministry of Finance to unlock over $2 billion of funding for the power sector.

"We have a strong, successful track record of delivering results under the toughest of conditions across Iraq and remain committed to building upon this legacy.”

GE employs up to 300 people in Iraq, more than 90 percent of whom are Iraqi nationals, and has supported the development of Iraq’s energy sector for more than 50 years. From Zakho to Basra, GE-built solutions are helping to enable growth, health, connection and safety in communities across Iraq.

Today, GE-built technologies contribute up to 55 percent of Iraq’s current electricity production, GE and its partners power more than 90 percent of the aircrafts operated by Iraqi Airways and nearly 4,000 GE Healthcare products are deployed in hospitals and clinics across Iraq.

(Source: GE)

By Mustafa Saadoun for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

US grants Iraq reprieve to continue buying Iranian gas

The United States has decided to grant Iraq a third 90-day sanctions waiver so it can continue to purchase gas from its sole provider, Iran, giving Baghdad some much-needed breathing room.

On May 22 in Baghdad, Joey Hood, US chargé d'affaires in Iraq, stressed to reporters that the waivers will not continue indefinitely, so the United States is working with Iraq to reduce its dependence on Iran.

Click here to read the full story.

Washington has exempted Baghdad from some of its unilateral sanctions against Tehran, allowing Iraq to continue importing energy from Iran, according to the US envoy to Baghdad.

Baghdad can now buy energy from Iran, US charge d’affaires Joey Hood told reporters on Wednesday, Iran's Press TV reported.

The waiver will allow Iraq to continue buying gas and electricity from Iran.

The administration of US President Donald Trump said in March it was extending a 90-day waiver for the second time to let Iraq continue energy imports from Iran.

The US envoy did not explain whether he was referring to the same waiver Washington gave Baghdad in March or he was declaring the issuance of new exemptions.

Gas imports from Iran generate as much as 45 percent of Iraq's 14,000 megawatts of electricity consumed daily. Iran transmits another 1,000 megawatts directly, making itself an indispensable energy source for its Arab neighbor.

Iraq and Iran share a 1,400-kilometer-long border. For their run-of-the-mill maintenance, Iraqis depend on Iranian companies for many things from food to machinery, electricity, natural gas, fruits and vegetables.

(Source: Tasnim, under Creative Commons licence)

The Rumaila oilfield produced 1.467 million barrels per day (bpd) in 2018 – the oilfield’s highest annual rate of production for 30 years. 2018 also saw the milestone of four billion barrels of oil produced since the Rumaila Operating Organisation [ROO] began operating in June 2010.

The results were reported in the 2018 Rumaila Annual Report, submitted by the Basra Oil Company (BOC) to the Iraq Ministry of Oil.

In accordance with BOC’s objectives, Rumaila continued its journey to becoming a more advanced oilfield in 2018. New infrastructure played an important part in the year’s success, with three major projects completed that help Rumaila’s capacity to produce its current high production rates, as well as contribute to securing the field’s long-term future.

The new Rumaila Power Plant began operating, providing 150,000kW of electricity to the Iraq National Grid and supporting Rumaila facilities; three new dehydrator and desalter production trains were commissioned – increasing production capacity by 124,000 bpd; and two degassing facilities installed new large-scale ‘free water knock out’ vessels that ensure oil quality remains high by stripping water from the hydrocarbons.

The introduction of new technologies continues to play a vital role in the field’s advancement. In 2018, this included: the further expansion of the ‘digital oilfield’ (with 2,000 digital sensors now providing instant data from wells, facilities and manifolds to guide production performance), the completion of a field-wide TETRA radio communications infrastructure, and new data analytics tools and frameworks that visualize, interpret and reveal meaningful insights to improve day to day working.

Underpinning the 2018 results has been the ongoing programme to drill new wells, optimize existing wells, and the injection of industrial-use water to restore pressure to reservoirs in the north of the field. Thanks to the water injection programme and its supporting operations, Rumaila has been able to produce oil from historically harder to access reservoirs: in 2018, the oil produced from the Mishrif reservoir was more than triple the amount of oil extracted from that reservoir in 2010 and generating results never previously achieved at the oilfield.

The 2018 Annual Report also highlighted:

• 59 Iraqi contracted companies won 85 contracts worth $650 million
• 220,181 training hours were delivered to Iraqi staff
• 31 new wells were drilled
• 23.5km² of land was cleared of unexploded ordnance
• 206,675m² of land was remediated
• $5 million spent on supporting Iraq’s oil and gas industry via the Rumaila Education Fund

Rumaila General Manager, Hussein Abdul-Kadhim Hussein, commented:

“2018 was a remarkable 12 months in the 70-year history of this oilfield, as well as another exceptional year for the Rumaila Operating Organisation. The partnership goes from strength to strength: our success derives from the way BOC, BP and PetroChina continues to operate as one integrated team.”

BOC Director General, Ihsan Ismael, said:

“On behalf of BOC, I’d like to thank every single BOC staff member who has ensured that Rumaila continues to deliver successful oil production for Iraq, as well as pay tribute to the support of our partners, BP and PetroChina.”

ROO Deputy General Manager, Julian O’Connell, said:

“Rumaila is in service to Iraq. Our objective is to provide oil to support Iraq today, as well as create a legacy for the future. Our strategy and programme for field rejuvenation and training Iraqi personnel is helping us to achieve these twin goals and to overcome the multitude of challenges Rumaila faces.”

Rumaila Special Deputy General Manager, Fan Jianping, added:

“We are very pleased to report another successful year at Rumaila. Equally important is the fact that we have achieved this within a safe working environment. We of course want to increase production, but we also want Rumaila to be the pride of Iraq, which can only be achieved by having safety as the number one priority.”

(Source: Rumaila Operating Organisation)

By John Lee.

Iraq's Minister for Electricity has warned of the dangers of politicising the problems in the country's electicity sector.

Luay al-Khateeb told AFP:

"Electricity is a national security issue ... In the end, any political, economic or security crisis in Iraq will affect the whole region -- and the global economy will be open to threat. We're urging for this file not to be politicised."

The shortage of electricity in the summer months, when people rely on air conditioning to keep cool, has been a source of social unrest in the past.

Khateeb added:

"On October 25, the week I took office, electricity generation sat at between 9.5 to 10 GW. It is now at 15 GW. [Most Iraqi provinces] will receive no less than 20 hours of electricity per day. This, to be honest, is a level of production the country hasn't seen in years."

(Source: AFP)

An Iranian official said the exports of natural gas to Iraq are growing steadily and are expected to hit 40 million cubic meters a day in summer.

Managing director of the Iranian Gas Engineering and Development Company (IGEDC) Hassan Montazer Torbati told Tasnim that Iran’s gas exports to Iraq are constantly increasing and nearing a ceiling set on the contract between the two neighbors.

He noted that the exports will be rising as the hot season is looming with a surge in Iraq’s electricity consumption, adding that the daily export is expected to hit 40 million cubic meters.

Baghdad and Basra are the main export destinations of Iranian natural gas, the official added.

On a gas deal with Turkey, Montazer Torbati said Tehran and Ankara are planned to enter negotiations to extend the gas export contract during the last five years of the deal, adding that serious talks to renew the contract will kick off next year.

In June 2017, Iran started to export natural gas to Iraq after years of negotiations and settlement of financial problems.

Tehran and Baghdad had signed a deal on the exports of natural gas from the giant South Pars Gas Field in 2013.

Under the deal, the Iranian gas is delivered to Sadr, Baghdad and al-Mansouryah power plants in Iraq through a 270-kilometer pipeline.

Last month, Iraq’s Ministry of Electricity said the Arab country’s gas imports from Iran are planned to rise by 13 percent by January 2020.

(Source: Tasnim, under Creative Commons licence)

Iraq, one of the world's biggest energy producers, can address its current electricity shortfall and growing power needs through immediate action to relieve pressure on the system, according to an in-depth report published Thursday by the International Energy Agency.

It also provides a medium-term strategy that makes the best use of the country’s abundant oil and natural gas resources and solar potential.

Despite the extraordinary challenges of war in recent years, Iraq has made impressive gains, nearly doubling the country’s oil production over the past decade. But the turmoil has also undermined the country’s ability to maintain and invest in its power infrastructure.

The new IEA report, Iraq’s Energy Sector: A Roadmap to a Brighter Future, maps out immediate practical actions and medium-term measures to tackle the most pressing problems in Iraq’s electricity sector.

The analysis finds Iraq has huge potential to cut its electricity network losses, which are among the highest in the world. Reducing these losses by half would help dramatically improve the efficiency of grid supply, effectively increasing available capacity by one-third.

The report also takes a detailed look at the country’s oil and gas sector. It projects that Iraq’s oil production will grow by 1.3 million barrels a day by 2030, accounting for the third-largest increase globally over the period, and soon becoming the world’s fourth-largest oil producer behind the United States, Saudi Arabia and Russia.

The report also notes that more gas can be captured and put to use in efficient power plants. Today, 16 billion cubic meters of gas are flared each year, more than enough to replace Iraq’s current imports.

Dr Fatih Birol, the IEA’s Executive Director met, with Iraqi President Barham Salih on Wednesday in Baghdad, and presented the study’s findings and recommendations. He then met with Prime Minister Adil Abdul-Mahdi to discuss ways forward for the electricity sector, including making best use of Iraq’s significant natural gas and solar resources.

On Thursday, Dr Birol will discuss the report at a press conference with Thamir Ghadhban, the Deputy Prime Minister for Energy and Minister of Oil, and Luay Al-Khatteeb, the Minister of Electricity.

The IEA has worked closely with the Iraqi Ministries of Oil and Electricity to produce the report, and would like to thank the ministers and their staff for their cooperation with this study.

“Operating under extremely challenging circumstances, Iraq has done a remarkable job expanding its oil industry,” said Dr Birol. “Today’s urgent issue is to address the national power sector as the summer heatwave approaches by improving grid maintenance, boosting electricity production with larger mobile generators, and incentivising upgrades of power plants. The IEA is pleased to recommend immediate practical actions for the benefit of the entire Iraqi people, and provide a roadmap for a sustainable power system in the medium term.”

Iraq’s electricity demand is set to double between now and 2030, and its shortfall in electricity supply will widen, as the country’s population grows by more than 1 million people each year.

Without changes to the current structure of electricity supply and improvements to the network, domestic generation, imports and neighbourhood generation would need to double by 2030, for a total supply of over 250 TWh. However, there are many opportunities to improve on this outcome through measures such as investing in transmission and distribution to cut network losses.

Promoting the more efficient use of electricity, including by introducing more progressive tariffs, would play an important role in ensuring that the growth in demand during the summer peak does not continue to outpace supply.

Iraq also needs to take advantage of its abundant renewable energy potential.  The analysis shows that expanding the share of solar PV and wind to 30% of electricity supply by 2030 would bring benefits both to the Iraqi consumer, in the form of reduced electricity bills, and to the environment.

Reducing network losses and moving towards an electricity mix where renewables play a more prominent role would free up 9 billion cubic meters of gas for other uses in 2030, plus 450 kb/d of oil for export.

“In addition to oil, Iraq is blessed with some of the richest solar and gas resources in the world but it is yet to take advantage of them,” Dr Birol said. “Turning that potential into fuel for its own economy and for export would help bring about a more sustainable, reliable and affordable energy future.”

The report is the second in-depth study of Iraq’s energy sector following the publication of the Iraq Energy Outlook in 2012.

Download the report here.

(Source: IEA)

By John Lee.

Standard Chartered bank is reportedly reviving stalled plans to open a new branch for corporate customers in Basra in the first half of 2020.

This would be the UK-based bank's third branch in Iraq.

Its Iraq CEO Mohammed Jawad Al-Delaimy told Bloomberg:

“Security in Iraq has improved dramatically ... We have witnessed international companies decreasing their security requirements and risk levels.”

He added that profits in Iraq have been increasing since 2014, and said the bank plans to sign financing deals worth about $500 million for electricity projects by early next year.

More here.

(Source: Bloomberg)

By John Lee.

The National Investment Commission (NIC) has published details of a new round of solar energy projects:

The Ministry of Electricity is please to invite local, regional and international Independent Power Producers (IPP) to submit Expressions of interest (EOI) to embark into a proposed reverse auctioning round for SEVEN (7) Green field solar PV IPP projects (each a "project") with a potential combined capacity of 755MWp.

A project involves the design, finance, construction operation and maintenance of a utility scale solar power project to the Ministry on a Build, Own and Operate (BOO) basis. A dedicated Special Purpose Vehicle (SPV) shall be established to undertake the construction and operation of each project.

The Ministry, in its commercial capacity as a grid operator, will connect the SPV to the Iraqi transmission grid under a Transmission Connection Contract (TCC) and, in its capacity as owner of the land, will lease the land to the SPV under a Land Lease Contract (LLC). Also, the Ministry will purchase produced electricity from the SPV under the terms of the power purchase Contract (PPC).

The Ministry expects these project(s) to employ around 1300 people in the Republic of Iraq and supply more than 250,000 households with critically needed electricity supply.

The following projects are available :

• Sawa-1 Solar PV IPP with a capacity of 30 MWp to be located in Muthana Province,
• Sawa-2 Solar PV IPP with a capacity of 50 MWp to be located in Muthana Province,
• Khidhir Solar PV IPP with a capacity of 50 MWp to be located in Muthana Province,
• Iskandariya [Alexandria] Solar PV IPP with a capacity of 225 MWp to be located in Babil Province,
• Jissan Solar PV IPP with a capacity of 50 MWp to be located in Wassit Province,
• Karbala Solar PV IPP with a capacity of 300 MWp to be located in Karbala Province,
• Al-Diwania Solar PV IPP with a capacity of 50 MWp to be located in Diwania  Province,

The above project(s) may, at the Ministry's discretion, be tendered on a standalone basis or grouped. For the proposed tender, the Ministry will conduct a transparent, fair and competitive reverse auctioning process to select a developer or a consortium for a single or a group of project(s).

Parties interested in participating (the "respondent") in the process must fulfill the following pre- requisites for short listing:

• Successful, proven and verifiable technical and financial capability and experience of no less than 10 years in developing renewable energy IPP Project(s) of no capacity less than 50 MW on an individual and not collective project basis, particularly utility scale solar PV projects.
• An average annual turnover of more than US$ 10 Million for the last three years solely from revenues obtained via renewable energy projects development and operatorship, preferable majorly from solar PV projects.
• Previously awarded projects should have been tendered according to the Public Private Partnership (PPP) model on similar auctions regionally or globally.
• The respondent must have registered and licensed official regional and international offices.
• The respondent must demonstrate previous initiative towards social responsibility and willingness to contribute to capacity building, to integrate local content, and to support the nascent renewable energy manufacturing and service sectors in the republic of Iraq.
• The respondent must have never been barred by the Government of the Republic of Iraq, or any entity controlled or regulated by them, from participating in any project or conducting work of any form in the Republic of Iraq, including the Kurdistan region of Iraq. Also this applies to any other government, or any entity controlled or regulated by any other government.

Respondents that fulfill the requirements above shall express their interest to participate in the tender process by 29 April.2019 and the finnnal time to receive the (IPP) documentation 60 days from the announced date.

The number call of is MOE- HQ5/ 2019 An package (the "package") must be sent in electronic copy format (a single PDF file) from an official business email address to [email protected]

The requirements set herein;

• Name of the respondent
• Name and contact details (Postal address, telephone number, and email address) for the appropriate point of contact (Point of Contact) to whom future correspondence may be sent; and
• Where the respondent is considering potential consortium partners, an indication of such intention and details of potential consortium partners (to the extent it is known).

The Ministry will not consider any proposals or packages submitted by mail, in person, or via liaison.

The following submission of the EOI, and after passing this stage this stage the respondent will bay the documentation (RFQ). The RFQ will include further information, including a description of the project(s), an outline of the tender process and eligibility criteria for pre- qualification.

The announcement shall not constitute in any way a commitment by the Ministry to proceed with the next stage, hold the proposed reverse auction, announce the tender, award any project or comply with the information provided herein. The Ministry retains the right to amend the scopes of the project(s), modify, extend, cancel or suspend the project(s), at any time for any reason without clarification or any liabilities for the Ministry or any other entity of the Government of the republic of Iraq.

This announcement shall be considered a complementary and integral part of the Project(s) Documentation.

(Source: NIC)

IMF Staff Completes 2019 Article IV Mission on Iraq

An International Monetary Fund (IMF) team led by Gavin Gray visited Amman from April 26 to May 2, to hold discussions with the Iraqi authorities in the context of the 2019 Article IV Consultation.

At the end of the visit, Mr. Gray made the following statement:

“The end of the war with ISIS and a rebound in oil prices provide an opportunity to rebuild the country and address long-standing socio-economic needs. However, the challenges to achieving these objectives are formidable. The economic recovery has been sluggish, post-war reconstruction is limited, and large current spending increases risk placing the public finances and central bank reserves on an unsustainable path. Moreover, combatting corruption is critical to promote the effectiveness of public institutions and to support private-sector investment and job creation.

“Near-term vulnerabilities subsided in 2018, with the budget in surplus and a build-up in central bank reserves. Non-oil growth is expected to increase to 5.4 percent in 2019 on the back of higher investment spending. However, fiscal deficits are projected to rise over the medium term, requiring financing that may crowd out the private sector or erode central bank reserves. In these circumstances, it would be hard to sustain capital spending, and growth would slow markedly.

“Policy changes and structural reforms—including to improve governance—are therefore essential to maintain medium-term sustainability and lay the foundations for inclusive growth.

“Fiscal policy should aim to scale up public investment gradually while building fiscal buffers. To make space for this, staff recommends budgetary savings of around 9 percent of GDP over the medium term through tight control of current spending, particularly public-sector wages, and phased measures to boost non-oil revenue. Setting ceilings on current expenditure in the 2020 budget onwards would strengthen the fiscal framework’s capacity to support higher capital spending and to adapt to oil price shocks. Key reforms should include:

• Containing public-sector wages. Spending pressures could be dampened in the short run through compensation measures such as capping allowances, bonuses and other non‑base wage payments, and by not fully replacing retirees. Structural measures will be required over the medium term, based on a functional workforce review as well as deeper civil service reform once new HR management and information systems are in place.
• Electricity reforms are key to addressing the weak quality of service and reducing the high budgetary costs, due to modest tariff rates, chronic non-payment of electricity bills, poor maintenance and over-reliance on expensive generation sources, coupled with losses throughout the generation, transmission, and distribution process. It would be important to ensure that the poor and most vulnerable are protected throughout this reform.
• Bolstering public financial management. Enhancing the legal framework and improving commitment and other control systems are key to minimizing misuse of public resources and restoring budgetary discipline.

“In the financial sector, a robust plan to restructure the large public banks coupled with enhanced supervision is essential to secure financial stability and will help promote financial development and inclusion. Strengthening anti-money laundering and countering financing terrorism (AML/CFT) controls and oversight will help prevent Iraq’s financial sector from being misused for the laundering of criminal proceeds and terrorist financing.

“Addressing governance weaknesses and corruption vulnerabilities is critical to achieving the described policy objectives. As a first step, the authorities need to develop a comprehensive understanding of the corruption risks present in Iraq and then implement policies to tackle these risks in a coherent and coordinated manner. The legislative framework needs to be strengthened to effectively prevent officials from abusing their position or misusing state resources. To this end, laws strengthening the asset declaration regime and criminalizing illicit gains should be rapidly adopted. Furthermore, the independence and integrity of bodies involved in combatting corruption should be ensured and the AML/CFT regime should be mobilized to support anti-corruption efforts.

“The team will prepare a report that, subject to management approval, is tentatively scheduled to be considered by the IMF’s Executive Board in July 2019.

“The IMF team would like to thank the authorities for the candid and constructive discussions during this visit.”

(Source: IMF)