Iraqi Oil Ministry in $27 Billion Gas Growth Integrated Project With TotalEnergies
July 27, 2021
Cleary Gottlieb is representing the Ministry of Oil of the Republic of Iraq and two Iraqi state-owned companies, Basra Oil Company (BOC) and South Gas Company, in a major $27 billion investment project with TotalEnergies.
The Gas Growth Integrated Project, which is expected to be one of the largest projects ever in Iraq, will involve four components: (i) the construction and operation of a gas treatment facility for the processing of up to 600 million standard cubic feet per day or associated gas from the Ratawi, Majnoon, and West Qurna 2 fields (and potentially other fields in southern Iraq), and the production of processed dry gas, LPG, and condensates; (ii) the construction and handover to BOC of a seawater treatment plant with a capacity of 5 million barrels per day of water, and an associated transportation network, which will deliver treated water to various oil fields in southern Iraq to inject for purposes of maintaining reservoir pressure; (iii) the development and operation of the Ratawi field, with a goal of producing up to 210,000 barrels of crude oil per day; and (iv) the construction, funding, and operation of a 1,000 MW solar power generation project.
The goal of the Gas Growth Integrated Project is to maximize the collection and treatment of associated natural gas and eliminate routine flaring from the designated fields in southern Iraq and to provide an alternative source of energy that will help ease Iraq’s severe electricity crisis and regular power shortages. The gas treatment facility, the seawater treatment plant, and the solar power generation plant will be funded by TotalEnergies, which will recover costs and earn remuneration based on the volume of oil, dry gas, LPG, and condensate produced and the amount of electricity generated and transferred to the Iraqi power grid.
The Council of Ministers of the Republic of Iraq approved the Gas Growth Integrated Project on July 27, 2021. Signing of the relevant agreements is expected to occur in early September 2021.