TotalEnergies awards shares to Basrah Oil Co. and QatarEnergy in a $27 billion deal for the Integrated Gas Growth Project in Iraq
TotalEnergies and its partners invest in an integrated energy project in Iraq
After months of delays, TotalEnergies has agreed to give Basrah Oil Co. and QatarEnergy shares in two energy projects in Iraq as part of a $27 billion deal. The Integrated Gas Growth Project will capture associated gas, currently flared, from three oil fields for use in power generation. It will also build a seawater treatment plant to provide water injection to boost oil production.
Basrah Oil Co. will hold a 30% interest and QatarEnergy a 25% interest, with TotalEnergies holding the balance. The three companies will share a $10 billion investment in the project. The Iraqi cabinet approved the revision of its participation from 40% to 30%.
Iraq, the second largest emitter of flared gas after Russia, is seeking to attract foreign investment needed for its energy industry. The country mainly produces associated gas pumped with oil, which is subject to OPEC+ oil production quota restrictions. Iraq also flares most of its associated gas, making it the second largest emitter of flared gas in the world, according to the World Bank.
TotalEnergies and ACWA Power help reduce Iraq’s energy dependence
Iraq is trying to reduce its dependence on Iranian electricity and gas imports, which are subject to sanctions. The country receives waivers from the United States to import Iranian energy without financial consequences. Iraq also needs an injection of seawater into its oil fields to maintain pressure, especially in the huge southern fields operated by international oil companies.
As part of the agreement, TotalEnergies will also work with Saudi Arabia’s renewable energy company ACWA Power to develop a 1 GW solar power plant to supply electricity to the grid in the energy-rich southern province of Basrah.
The $27 billion deal, signed in September 2021, had been delayed due to differences over Iraq’s stake in the projects, which was originally set to be 40%, and other technical issues. However, with the revised participation and agreement with Basrah Oil Co. and QatarEnergy, TotalEnergies can move forward with its plans to boost the Iraqi energy industry while promoting sustainable practices.
