TotalEnergies and Iraq sign agreements for US$27bn projects

TOTALENERGIES has signed an agreement with the Government of Iraq, and the country’s National Investment Commission (NIC), for oil, gas, and solar projects in the Basra region, worth US$27bn over 25 years.

According to TotalEnergies, Iraq, which is rich in natural resources, is experiencing electricity shortages amidst a sharp increase in demand. The Financial Times reports that the country has been courting foreign investors to boost oil output and natural gas capture to alleviate shortages.

Through the announced projects, TotalEnergies – supported by the Iraqi authorities – expects to enhance the development of the nation’s natural resources to improve electricity supply.

Under the agreements, TotalEnergies will invest in installations to recover gas being flared on three oil fields to supply gas to 1.5 GW power generation in a first phase, expanding to 3 GW in the second phase.

TotalEnergies highlights that it will construct a new gas gathering network, treatment units to supply local power stations, and work to optimise oil and gas production at the Ratawi field by building and operating new capacities. Reuters reports that the company will build a processing plant for gas produced at the southern fields of Artawi (Ratawi), Luhais, Majnoon, Tuba, and West Qurna 2. It adds that TotalEnergies will help boost output at Ratawi from 85,000 bbl/d to 210,000 bbl/d.

The agreements also include construction of a large-scale sea-water treatment unit to increase water injection capacities in southern Iraq fields without increasing water withdrawals as the nation faces a water stress situation. Water injection is needed to maintain pressure in several fields and so will help optimise production of natural resources in the Basra region.

Another agreement will see TotalEnergies construct and operate a photovoltaic power plant with peak production of 1 GW to supply electricity to the Basra region electricity grid.

TotalEnergies CEO Patrick Pouyanné said that the company supports producing countries in their energy transition by combining natural gas production with solar energy to meet growing electricity demand.

The agreed projects will cost US$10bn in capital expenditure, and over the following 25 years the investment will grow to US$27bn including operational expenditure.

According to Reuters, Pouyanné said the plan is to mobilise teams in Iraq by the end of 2021.

Pouyanné commented: “Our ambition is to assist Iraq in building a more sustainable future by developing access to electricity for its people through more sustainable use of the country’s natural resources such as: reduction of gas flaring that generates air pollution and greenhouse gas emissions, water resource management and development of solar energy.”