TotalEnergies, Iraq Sign $27-Billion Energy Development Mega-Deal
French operator will assist country with enhanced oil recovery, natural gas gathering, and solar projects.
TotalEnergies has signed a $27-billion deal with Iraq to conduct four large energy projects—in oil and gas and renewables—in the country’s Basra region. Work is due to being immediately on a $10-billion investment that will include enhanced oil recovery and the construction of a gas processing plant for natural gas produced at several southern fields.
“These agreements signal our return through the front door to Iraq, the country where our company was born in 1924,” said Patrick Pouyanné, TotalEnergies' chairman and chief executive. “Our ambition is to assist Iraq in building a more sustainable future by developing access to electricity for its people through a 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.”
TotalEnergies, with the support of the Iraqi authorities, will invest in installations to recover gas that is being flared on three oil fields and as such supply gas to 1.5 GW of power generation capacity in a first phase, growing to 3 GW in a second phase. It will also develop 1 GW of solar electricity generation capacity to supply the Basra regional grid.
Iraqi Oil Minister Ihsan Abdul Jabbar said the first phase will include a $3-billion investment by the French group in a project to construct a large-scale seawater treatment unit. The facility will increase water-injection capacities in southern Iraq fields without increasing water withdrawals as the country is currently facing a water-stress situation. The water injection is required to maintain pressure in several fields and will help to optimize the production of the natural resources in the Basra region.
TotalEnergies will also provide $2 billion to build a processing plant for gas produced at the southern fields of West Qurna 2, Majnoon, Artawi, Tuba, and Luhais. It is expected to produce 300 MMcf/D and double that after a second phase of development.
The deal also includes construction of a new gas gathering network and treatment units to supply the local power stations, with TotalEnergies also bringing its expertise to optimize the oil and gas production of the Ratawi field by building and operating new capacities.
The construction and operation of a photovoltaic power plant with a capacity of 1 GW to supply electricity to the grid in the Basra region is also planned.