Iraq-The Challenges and Opportunities of Power Sector

8/11/2019 Iraq-The Challenges and Opportunities of Power Sector

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Iraq: The Challenges and Opportunities ofConstruction in Iraq and the Power Sector

EIC Connect Oil, Gas & Power Abu Dhabi, June 2013


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Agenda Jeff Larkin OBEDirector Power & Water, MENA RegionPB Country Manager and Program Director, Iraq (2004 2011)

PBs Background in Iraq Challenges Opportunities Take Aways


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PBs Support in Iraq

2004 - 2007 IRRF Reconstruction program support through PCO 2007 2008 Commissioning of Mussayib Power Plant under GRD 2007 2008 Operations, Maintenance and Sustainability (OMS) Project 2008 2009 OMS II under contract to ME (6 months) 2008 2009 Private Generation Study

Load Forecasting StudyRegulatory Law 2009 KRG master plan (Final presentation 16 Nov) 2009 2013 Consultancy services to MoE-KRG (ongoing) 2009 2010 Iraq Electricity Master Plan 2011 Study of Reverse Osmosis Operations in Iraq for UNICEF 2011 2012 Garraff Field Power Study for Petronas 2012 - 2013 Protection Study of the Transmission Network (ongoing) 2013 Various IOCs in southern Iraq


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Al Basrah Power: 22MWShuaiba Power: 22MW

Haditha Hydro Power: 105MW

Dibis Power Plant: 45MW

Buzurgan Power: 32MWNasiriyia Power: 28MW

Bayji Gas: 260MW

Bayji Mobiles Plant: 120MW

Al Ameen Substation 400kVTaji Substation

Quds Power Plant: 180MWTaji Power Plant: 51MW

Hilla Power Plant: 18MWNajaf Power Plant: 52MW

Dibis-Erbil Overhead Line

North Distribution: (43) RCI, WII

Transmission

National ControlGeneration

Mosul East Power: 55MW

Central Distribution RCI: (63)

DistributionKhor Zubair Power: 246MW

Key BenefitsIncreased Power Generation to 1.3M homesImproved Electricity Distribution to 251K homes

Project Overview- Major Projects Completed

South Distribution: (26) RCI, Perini

PTCH Project Phoenix II: 65MW

Contracting Method Projects Project

Value

DB Contractors, Cost Plus 80 $856M

Direct Contracting 82 $ 76M

Total 162 $932M


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Transmission

National ControlGeneration

Distribution

Country-wide National Command& Control System (6)

Central Distribution RCI (32)

South Distribution (42) RCI, Perini

North Distribution (27) RCI,WII

Ammara 400 kV Substation

Sadr City Distribution (69)

Baghdad 132 and 400kV S/Ss (8)

Mosul 400kV Substation

Al Rasheed 400kV Substation

Oil Field Injection Substation (10)132kV Substations Rehabs (5)Umm Qasr 132kV Substation

Key BenefitsImproved Power to Baghdad RingReduced Risk of Nationwide/Regional BlackoutIncreased Power Generation to 80K HomesGenerate Over $10M/Month Oil RevenueImproved Electricity Distribution toover 362K HomesMaintain generation units


Baghdad Services RCI (25)

Sammara Mobile 132kV S/S

Generation O&M (Nationwide)Reliable Power

Sustainment projects: 60 MW

Diyala Substation Rehab.

Baiji V94 upgrades: 28MW

Contracting Method ProjectsProjectValue

DB Contractors, Cost Plus 35 $488M

Direct Contracting 210 $852M

Total 245 $1,340M


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Generation

Distribution

Key Benefits Reduce occurrence of blackouts; more reliable power Increased and Sustained Power Generation to39K Homes

Improved Electricity Distribution to 51K Homes Maintain generation units

Sustainment Projects

Shuaiba 2: 21.5MW


Baghdad Services RCI (5+) and

PRDC projects (14+)

Dohuk-Aqra 132kV OHL and S/S

Al Qaim 400kV Substation Rehab

Fallujah 132kV Substation Rehab

Hashemiya-Shamiya 132kV OHL

Ramadi 132kV Substation Rehab

Babil-Karbala 132kV OHL

Wassit 400kV Substation Rehab

Old Mullah: 21.5MW

Old Diwaniyah 132kV S/S

Nasiriya - Shatre 132kV OHL, S/S

East Sulaymaniya 132kV S/S andKalar 132kV S/S

Hilla South- Hashemiya 132kV OHL

East Baghdad SCADA

Farabi/Jameela 132kV Substation

Baiji-Haditha-Qaim 400kV OHL Con.

Al Anbar S/Ss and Feeders (6), andFallujah Materials (11)

Contracting Method ProjectsProjectValue

DB Contractors, Cost Plus 0 $0 M

Direct Contracting 61 $415M

Total 61 $415MTransmission

National Control


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Iraq Elasticity Master PlanRecommended Plan - Capacity Installed


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Layout of the 400 kV Networkduring the Short Term Plan

400KV NETWORK IN 2015


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Challenges

Practical and logistics Business Models and Entry

Contractual and Commercial Security


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Challenges Practical and Logistics

Communications costly and unreliable Access in and out of Iraq is difficult, for us to get in and the

Ministry staff to get out Visas are difficult to obtain abroad Entry rules in Baghdad, Basrah and Erbil are different

Good expat staff willing to work in Iraq are still hard to find Need security provider, for movements and static security

Housing and hotel accommodation is limited


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Challenges Business Models and Entry

Local agents and partners sourced through embassy and export trade depts. Traditional approach Hard to find good, reliable local agents Many promises, but little delivered

USAID contracts are still being awarded as part of the Security Agreement between US and Iraq A US government contract provides entry advantages, security, badging, and access to

support International donor agencies World Bank, UN (UNDP and UNICEF) have large programmes

Still hard to execute if you do not know the market place The IOCs have started their own procurement processes for oil field development, this will open

up further opportunities But still hard to execute without local knowledge, experience and presence

National Investment Commission www.investpromo.gov.iq The NIC, led by Chairman Dr. Sami Al -Araji, was established to be the face of private

investment in Iraq and serve as promoter, facilitator, monitor, and policy advisor forinvestment into Iraq.

There are a number of business support companies who can provide entry support and most ofthe security companies are moving into business support operations as the security market startsto diminish
http://www.investpromo.gov.iq/http://www.investpromo.gov.iq/


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Challenges Business Models and Entry

Lack of local resources There is no reliable local industry Lack of locally sourced materials of good quality Lack of enough competent local contractors Shortage of locally trained skilled staff ISO 9000 and ISO 14000 unknown

There are good local contractors, but not enough. Local firms can do most of their ownconstruction, but lack capabilities in the latest technologies

Local contractors do want international partners and support, and they need it: Financial backing Design capability Procurement support Project management and project scheduling

Either team with an international organisation already established, such as PB, or find alocal firm that offers synergies and develop a long term partnership to support anddevelop them


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Challenges Contractual and Commercial

GoI contracting has not progressed in the last 15 years Mentality is still that rules and regulations are set by the central

government to be followed by the Ministries Lack of an overall Program Management Office within the GoI Lack of an effective project delivery system within the Ministries

Financial The local banking sector is lagging behind Int standards LOCs through the TBI take up to 10 months Payment security Bank Guarantees and Export Credit Guarantees could be difficult

(ECGD, EXIM, OPIC) Local registration is needed to sign contracts with Iraqi Ministries

Need a local lawyer and accountant There are organisations that will help you do this


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Challenges Security

Terrorists organisations are still able to launchattacks at the centre of government - at will

Threat of kidnapping has reduced, but could increaseagain

Lack of stable government could, and is, leading toincreased violence and reduced security


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Working around ongoing military combat operations andcoordinating with US Mil and ISF (CONOC) the localmilitary commanders own their battle space

Life support issues lack of secure accommodation

Need to find a credible security provider Need to establish your own Security Policy and a Security

Plan - Make sure your staff understand and follow it Daily security briefs and intel reports keep staff on their

toes and minimizes complacency Everyone needs to know the - Actions On

Challenges - Security


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Iraqs Opportunities


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$27 Billion to Develop Electrical Sector(2008-2016)

Total (Millions)Activity

$15,540 New Steam Generation &Gas Turbine Generation

Stations

$1,325 Rehabilitation of ExistingGeneration Stations

$9,730 New Transmission &Distribution Networks

$535

Rehabilitation of Existing

Transmission & DistributionNetworks


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Existing 2009 Kurdistan System


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Proposed 2015 Transmission System


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Layout of the 400 kV Networkduring the Short Term Plan

400KV NETWORKIN 2015


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Estimated Overall Investment Cost(US$ millions)

Short Term Long Term2011-15 2016-20 2021-25 2026-30 TOTAL

Generation 5,000 11,101 10,269 10,800 37,170Transmission (1) 4,002 1,387 1,844 2,633 9,866Distribution Rehab 8,549 8,549Distribution - Expansion 4,644 3,910 5,132 7,699 21,385

TOTAL 22,195 16,398 17,245 21,132 76,970Per Year: 3,849

(1) Scenario C with Thermals Base load forecast


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The ME has purchased 56 Frame 9E gas turbines(30 units require balance of plant EPC)

SITE EQUIPMENT

AL KHAYRAT(KARBALA) 10 X 125 MW

QUDAS (BAGHDAD) 4 X 125 MW

AL QAYIRA (NINAWA) 6 X 125 MW

MANSURIA (DIYALA) 4 X 125 MW

WASIT (WASIT) 6 X 125 MW

GE Equipment Sites


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3

2

1

4

5

GE Megadeal Sites1 - Al Khayrat (Karbala)2 - Qudas (Baghdad)

3 - Al Qayira (Ninawa)4 - Mansuria (Diyala)5 - Wasit (Wasit)


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Siemens Equipment Sites

The ME has purchased 6 X V94.3 and 10 x V94.2 Siemensgas turbines (9 units require balance of plant EPC)

SITE EQUIPMENT

BAYJI (SALAH AD DIN) 6 X 160 MW

TAZA (KIRKUK) 1 X 260 MW

SADR CITY (BAGHDAD) 2 X 160 MW


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2

1

3

IQ5PP Sites1 - Bayji (Salah ad Din)2 - Taza (Kirkuk)

3 - Sadr City (Baghdad)


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Iraq seeks IPPs to Build/Own/Operate plants

Eight sites utilizing equipment purchased from GE & Siemens:

The ME & the National Investment Commission have issued aninvitation for proposals; see www.investpromo.gov.iq orcontact the ME

Nassariya (Dhi-qar)

Samawa (Muthana)Diwaniya (Qadisiyah)Shat Al Basrah (Basrah)

Amara (Maysan)

Rumalyia (Basrah)Dibis 1 (Kirkuk)Dibis 2 (Kirkuk)

Independent Power Producers


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Take Aways .

A lot has been done already and it is possible to operate safelyin Iraq.........provided you take the necessary precautions Security remains an issue, as do the commercial and financial

environments, but security can be managed at a cost The Ministry of Electricity is setting itself up for the future, but

currently lacks any PMO or GOI coordination cell With 10,000 MW to build, this will create many opportunities for

those willing and able to operate effectively in this environment Thus the scope and scale of this effort is enormous, the Iraqi

electrical sector requires.

10+ YEARS and $4 BILLION pa


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Thank youJeff Larkin

Parsons Brinckerhoff

Abu Dhabi

[email protected]

Rebuilding for their future

Iraq-The Challenges and Opportunities of Power Sector

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