Iran builds $2.5 billion power plant in Iraq

Iran is building a natural gas combined cycle power plant in Iraq’s Basra at a cost of $2.5 billion in the Persian country’s biggest engineering services deal yet. 

The project, being carried out by Iran’s MAPNA Group, aims to add 3,000 megawatts of electric power to Iraq’s national grid which is saddled with acute shortfalls at its current 8,500-megawatt capacity.

The deal, signed with the Iraqi-Jordanian Shamara Group, follows MAPNA’s successful implementation of Najaf and Baghdad power plants which will imminently receive the Iranian gas through a pipeline to begin operation.

MAPNA Managing Director Abbas Aliabadi said Monday his company had started execution of the Rumaila power plant near Basra after 1.5 years of negotiations with the Iraqi side.  

The facility will be completed in four years, with the first unit expected to join the national grid in early 2017.  

The deal includes the Iraqi government’s guaranteed purchase of the electricity produced at the power plant for 15-17 years, Shamara CEO Ali Shamara said, adding his country will finance the entire project.

MAPNA will supply equipment, including gas and steam turbines and boilers besides engineering and supervising the project.

According to Shamara, security issues have been taken into account in deciding to build the facility in Rumaila in the relatively stable southern Basra which is only 60 km from the Iranian city of Ahvaz.

“MAPNA’s reliability and its facile accessibility is one of the reasons which convinced us to cede the project to this company since it can immediately report to the site in any eventuality,” Shamara added.

The project is set to boost overall power generation capacity by 20% in Iraq which plans to generate 20,000 megawatts by 2016.   

Iran is playing a central role in the development plan through building a separate pipeline which will carry its gas to the power plants in Najaf as well as Sadr City in Baghdad and al-Mansuriya south of the Iraqi capital.

On Saturday, Managing Director of the Iranian Gas Engineering and Development Company Alireza Gharibi said the last section of the pipeline to Baghdad is being tested for the start of the gas flow.

Last month, the Fars news agency, citing informed energy industry sources, said the plan for exports to Iraq had been pushed back again over concerns about the security of the pipeline.

Iran is expected to initially deliver 4 million cubic meters of gas per day (mcm/d) before raising it to 35 mcm/d later to feed the three electricity generation plants in Iraq.

Exports were planned to start in the Iranian month of Ordibehesht which ended on May 21. The source said he hoped the transfer of gas would begin in Shahrivar in the next two months or so.

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