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Iraq launches Chinese - funded oil field project - Geoeconomics


  • As a major oil-producing country, Iraq has long relied on Iran for one-third of its electricity supply, which has caused considerable embarrassment in the energy security and international political environment.

  • To remedy this situation, Iraq launched a natural gas processing project in the Halfaya oil field, led by China National Petroleum Corporation, with the aim of converting the associated natural gas into its electricity supply to achieve energy self-sufficiency.

  • Recently, Iraq successfully launched a new natural gas processing project in the Halfaya oil field.

  • The launch of the new project, therefore, is an important measure taken by the Iraqi government to change this situation. Successful implementation of the project will help Iraq reduce its dependence on external energy, improve the security of energy supply, and increase its bargaining power in the international energy market.



As a major oil-producing country, Iraq has long relied on Iran for one-third of its electricity supply, which has caused considerable embarrassment in the energy security and international political environment.


The new Crude Processing Facility 3 oil station in the Halfaya oilfield in southern of Maysan province, Halfaya. Reuters

To remedy this situation, Iraq launched a natural gas processing project in the Halfaya oil field, led by China National Petroleum Corporation, with the aim of converting the associated natural gas into its electricity supply to achieve energy self-sufficiency.


Recently, Iraq successfully launched a new natural gas processing project in the Halfaya oil field.


Iraq's Prime Minister Mohammed Shia' Al-Sudani inaugurated a major gas processing project in the Halfaya oilfield in Maysan governorate.

This milestone marks an important step for Iraq in the development of oil and gas resources.


Iraqi Prime Minister Mohammed Shia Sultani personally launched the project, demonstrating the Iraqi government's close attention to energy self-sufficiency and economic development.


Deputy Prime Minister for Energy Affairs and Minister of Oil, Hayyan Abdul Ghani, stated that the commissioning of the Halfaya gas processing plant represents a significant addition to the industry's utilization of associated gas and the prevention of its flaring, transforming it into a valuable energy source to support Iraq's energy sector.

According to official statements, the project is intended to process 300 million cubic feet

of associated natural gas per day. In the past, due to the lack of treatment facilities, this natural gas was often burned and dumped, resulting in wasted resources and environmental pollution.


Now, thanks to this project, these natural gases will be effectively utilized and transformed into valuable energy resources.


The Halfaya field is located in Maysan province in southern Iraq, about 300 kilometers from the capital Baghdad.


It is developed and operated by a consortium led by China National Petroleum Corporation. The oil field has an estimated reserve of 4.1 billion barrels, and the value of the associated natural gas associated natural gas will be fully reflected by the implementation of the new project.


The Halfaya gas processing project is one of the most important integrated projects achieved thanks to the directives and follow-up of the Prime Minister and the efforts of the joint management of the Halfaya field, comprising China's PetroChina [CNPC] and Maysan Oil Company (MOC), which adhered to the Ministry's plans and programs.

At the heart of the project are two powerful processing units, each capable of processing 150 million standard cubic meters of natural gas per day.


The processed dry gas will be supplied directly to the power plant in Maysan Province and is expected to increase power generation by more than 1,200 megawatts.


Abdul Ghani explained that the project aims to sweeten and dehydrate the gas, then separate its main components to produce dry gas for the national grid to supply power plants in Maysan, including the Al-Amarah government plant and the Maysan investment plant, generating over 1,200 megawatts. It will also produce liquefied gas for cooking and automotive fuel, with an initial capacity ranging from 1,100 to 1,200 tons per day.

This is undoubtedly a great benefit for Iraq, which often faces power shortages.


In addition to energy supply, the project will also produce liquefied gas and gas condensate, which will further enrich Iraq's energy export portfolio and increase its economic value.


At the same time, the production of sulfur by-products will provide new development opportunities for Iraq's chemical industry.


Iraq is OPEC's second-largest oil producer, but about one-third of its electricity demand depends on imports from Iran.

This dependence makes Iraq vulnerable to certain energy supplies and is affected by the international political environment.


In addition, the Iraqi government is also facing pressure from the United States to reduce its dependence on Iranian energy.


The launch of the new project, therefore, is an important measure taken by the Iraqi government to change this situation.


Successful implementation of the project will help Iraq reduce its dependence on external energy, improve the security of energy supply, and increase its bargaining power in the international energy market.


In addition, the implementation of the project actively responded to the international community's call for environmental protection and sustainable development.

By reducing natural gas flaring, Iraq can not only make more effective use of its valuable natural resources, but also reduce the negative impact on the environment, achieving both economic and environmental benefits.


The Deputy Minister for Gas Affairs, Ezzat Sabir, stressed that the project will contribute to stopping gas flaring, preserving a clean environment, and supporting the government's and ministry's efforts to invest in associated and free gas, as well as renewable energy.


Sabir added that the ministry has succeeded in utilizing 61 percent of associated gas and aims to reach 78 percent by the end of the year, with ongoing projects to invest in associated gas in oilfields to stop flaring and convert it into useful energy.


Important events


In 2023 Iraq and China celebrated the 65th anniversary of their ties.


In 2021 Xi Jinping, General Secretary of the CCP, pointed out that "Iraq was one of the first Arab countries to establish diplomatic relations with the People's Republic of China, and is also an important partner of China for Belt and Road cooperation in West Asia and North Africa."


In November 2023, Iraq and China announced a the establishment of the Iraqi-Chinese Business Council to strengthen trade and investment between Iraqi and Chinese companies.



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