Eurasia Press & News
Iraq is moving to achieve energy security by diversifying its energy sources and reducing reliance on imports of Iranian electricity and natural gas. A warning that expeditious action is needed was the removal of the U.S. sanctions waiver that allowed Iraq to import electricity from Iran. While Iranian electricity is only about 2% of Iraq’s demand, Iranian natural gas is over 40%, making diversification crucial.
Washington uses Iraq as a platform for its campaign against Iran, going back to its support for Saddam Hussein after he attacked Iran in 1980. To increase energy security and minimize U.S. involvement in its internal affairs, Iraq has taken considerable steps to boost domestic production, increase imports from other neighbors, connect to regional power grids, and upgrade the domestic power distribution system.
Boosting domestic production
Iraq has vast oil and natural gas reserves but flares much of the gas due to underdeveloped infrastructure. The $27 billion Gas Growth Integrated Project with TotalEnergies will capture flared gas, turning it into fuel for power generation, and treat seawater to manage pressure in oil wells in Iraq’s Basra region. The Common Seawater Supply Project (CSSP), funded by Iraq and China, aims to deliver 5 million barrels per day of water to oil fields across Southern Iraq to help sustain and increase production.
Iraq is expanding gas fields like Khor Mor in the Kurdistan region which recently reached production of 500 million barrels of oil equivalent. Khor Mor provides the fuel for around 75% of the Kurdistan region’s electricity generation. The recent expansion of Khor Mor was partly funded by the U.S. Development Finance Corporation.
Iraq recently signed deals with two U.S. companies to increase domestic power production.
The GE Vernova contract will build “combined-cycle gas power plants with a total capacity of approximately 24,000MW, marking the largest and most advanced electricity generation initiative in Iraq’s history.” A deal with UGT Renewables, funded by U.S. Export-Import Bank and the UK Export Finance agency, will build a three-megawatt integrated solar energy project, battery energy storage systems totaling up to 500 megawatt-hours, modernization of power transmission and distribution lines, and the construction of up to 1,000 kilometers of new high-voltage direct current infrastructure for long-distance power transmission.
Iraq engaged Britain’s BP to redevelop four oil and gas fields in Kirkuk in the Kurdistan region. The fields have approximately 9 billion barrels of recoverable oil that will supply underutilized refineries in northern Iraq.
Iraq is examining earlier commitments with the intent of quickening the pace of development.
The government recently awarded the first phase of the development of the Akkas gas field to the U.S.-based SLB, formerly Schlumberger, a premier oilfield services company. Akkas has 5.6 trillion cubic feet of proven natural gas deposits which would make it the second largest non-associated gas field in the world after Qatar’s North Field.
The work was previously awarded to the Ukrainian firm Ukrzemresurs, but Baghdad may feel that time is of the essence so it engaged SLB. Akkas is also tied to a plan for a 1,642 megawatt combined-cycle power plant near the Syrian border, that will generate electricity for Al-Anbar province and the national grid, so Baghdad likely felt it best to engage a known service provider, and one that is U.S.-based.
Increasing imports
Iraq is looking to Qatar and Oman for liquefied natural gas, with plans for two floating regasification terminals at Khor al-Zubair to receive these supplies. A pipeline to transport gas to power plants near Basra is under construction. There’s also an agreement with Turkmenistan to supply gas, though its viability is questionable as it would cross Iran, so Iraq is seeking the appropriate legal mechanism to green-light this effort. These alternatives aim to dilute Iran’s leverage, which is already shaky. Recently, Iran cut its gas exports to Iraq due to its own shortages. Iraq is linking its power network to the Gulf Cooperation Council Interconnection Authority (GCCIA) grid which will supply 500 megawatts of power to southern Iraq. It is also importing power from Jordan and Türkiye, with plans to double Türkiye’s contribution.
Türkiye has announced plans for the construction of new oil and natural gas pipelines from Basra to the Mediterranean energy hub at Ceyhan, Turkey, expanded electricity cooperation, and short-term gas supply arrangements.
Renewable energy is another opportunity, as Iraq has one of the highest solar irradiation levels in the world. Iraq has committed to 20% renewable energy by 2030, but the only solar project launched so far is a 1-gigawatt plant tied to the $27 billion TotalEnergies oil and gas deal, but the UGT Renewables deal promises additional solar capacity. Other companies like ACWA Power (Saudi Arabia), PowerChina, and Masdar (United Arab Emirates) are also involved in developing solar power parks. Despite the government’s ambitions, the power grid’s fragility limits how fast renewables can scale up.
Modernizing Infrastructure
Iraq should upgrade power transmission and distribution networks, as well as building new high-voltage transmission lines, to improve energy efficiency and reliability.
Iraq’s power network suffers high transmission and distribution losses, which are estimated at up to 50 percent, driven by “grid inefficiencies, illegal connections and non-billing practices.” Iraq is partnering with Germany’s Siemens to modernize the power infrastructure and improve grid efficiency. And General Electric recently announced the completion of thirty substations to support transmission networks, in addition to its previous efforts to add nineteen gigawatts to the electricity grid.
More abundant and reliable electricity supplies will ensure civil peace and public health, help attract foreign direct investment, and help move Iraq’s economy away from hydrocarbons, and towards services, manufacturing, and tourism. Energy security is a must for the success of Iraq’s key infrastructure project, the Development Road, a $17 billion rail and motorway from Al-Faw in southern Iraq to Türkiye.
Decades of war, sanctions, corruption, and mismanagement have left Iraq’s grid unable to meet demand, especially in scorching summers. Iran’s unreliable delivery of gas, when its own system falters, forced Iraq to act.
As it diversifies its energy landscape, Iraq will build stronger ties with Türkiye and the GCC, and the region will grow stronger, richer, and more independent.
Challenges remain. National budgets are tied to volatile oil prices, which introduces uncertainty in future spending plans. Washington will prioritize its campaign against Iran, regardless of the impact on Iraq, through measures like the “Free Iraq From Iran” bill, which threatens sanctions on Iraq if it doesn’t follow Washington’s plan for Iran. Corruption and political meddling, sometimes from Iran-backed groups, will slow or derail projects. Plus, the grid itself is weak and lacks resilience. Diversifying sources will not solve all problems unless these deeper issues are fixed. U.S. financial and technical assistance will help Iraq build a more resilient and dependable system from pipeline to stove top, and will contribute to economic growth, regional stability, and the achievement of Iraq’s sustainable development goals.
Iraq’s energy security strategy demands a mix of tapping its own energy reserves, securing gas from friendly neighbors, dipping into renewables, and plugging into regional grids, while navigating a maze of internal dysfunction and external pressures to ensure the country does not become a battleground for others.
