TotalEnergies Seals $10B Deal to Develop Fuel Supplies, Power Generation for Iraq

TotalEnergies, the French oil and gas multinational company formerly known as Total, has bagged deals representing a total $10 billion with the government of Iraq to help the resource-rich country address power shortages.

The company said on Sept. 6 that following the agreements with the Iraqi Ministries for oil and electricity and the country’s National Investment Commission, it will invest in installations to recover gas that is being flared on three oil fields to supply gas to 1.5 GW of power generation capacity in a first phase. That gas capacity will double to 3 GW in a second phase. TotalEnergies will also develop 1 GW(ac) of solar generation capacity to supply the regional grid around Basra, Iraq’s main port. 

The agreements will include the construction of a new gas gathering network and treatment units to supply the local power stations. “TotalEnergies also bringing its expertise to optimize the oil and gas production of the Ratawi field, by building and operating new capacities,” it said. In addition, it will build a “large-scale” seawater treatment unit to increase water injection capacities in southern Iraq fields without increasing water withdrawals. The company noted the country is currently facing a water-stress situation. “This water injection is required to maintain pressure in several fields and as such will help to optimize the production of the natural resources in the Basra region.” Finally, it will build and operate a 1-GW photovoltaic plant to supply power to the Basra region.

The deal is a major achievement for TotalEnergies. While it got its start in Iraq (as Total) in 1924 with the discovery of some of the world’s most productive oil fields, the French company quickly grew into a leading oil producer in the Middle East, a substantial refiner and petrochemical producer in Western Europe, and the biggest retailer in Africa. However, given its recent climate priorities—including ambitions to achieve carbon neutrality in 2050 or sooner—as well as growing energy demand, the company in May got its shareholders’ approval for a rebrand as TotalEnergies. The name change reflects a new strategy that will transform the giant into a “broad group by profitably growing its energy production, particularly from liquefied natural gas and electricity,” it said.

Documents suggest that over the next decade, TotalEnergies expects sales of its oil products to diminish by almost 30%. It says its sales mix will become 30% oil products, 5% biofuels, 50% natural gas, and “15% electrons, primarily of renewable origin.” The company’s reinvention is also staked on notable ambitions to become one of the world’s top 5 renewable energy providers by 2030. Under that goal, it is looking at boosting its current renewable capacity from 7 GW to 100 GW in the next 10 years. “In order to make an active contribution to energy transition, TotalEnergies will increase the proportion of its investment dedicated to renewables and electricity, which will represent at least 20% of its annual investment as of 2021,” it said.

Already this year, the group has announced more than 10 GW in additional projects through the acquisition of a 20% stake in Adani Green Energy, one of the world’s leading solar developers. In January, it also announced a 50/50 joint venture with South Korean firm Hanwha Group’s affiliate 174 Power Global to develop 12 utility-scale solar and energy storage projects in the U.S. (in Texas, Nevada, Oregon, Wyoming, and Virginia) that represent a total 1.6 GW. The first project started production in 2020, and the remainder will be put on stream between 2022 and 2024. Separately, TotalEnergies in February also acquired a 2.2-GW pipeline of projects in Texas from SunChase Power. The pipeline consists of four large-scale solar projects, each with co-located battery energy storage systems in industrial areas close to Houston that have a high demand for electricity. The construction of the first two projects is expected to start later this year. All projects will come online between 2023 and 2024.

This April, it also signed an agreement to acquire a 23% interest in Yunlin Holding GmbH, the owner of Yunlin 640-MW offshore wind farm located off the coast of Taiwan. Yunlin joins a list of innovative large-scale projects TotalEnergies is spearheading. These include Erebus, a pioneering floating wind project located off the coast of Wales, UK, in waters 70 meters deep; Seagreen, a 1,140-MW fixed-bottom offshore wind project in Scotland; and Bada off the coast of South Korea, which is currently the largest floating offshore wind project in the world, with a production capacity of 500 MW.

Sonal Patel is a POWER senior associate editor (@sonalcpatel@POWERmagazine).

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