PowerChina Wins $4BN Contract For Iraq's First Major Seawater Desalination Facility
Iraqi Prime Minister Mohammed Shia al-Sudani attended the groundbreaking ceremony on Thursday for the Basra Seawater Desalination Plant, a Chinese-built facility with a planned capacity of one million cubic meters per day.
According to the premier's office, the project is scheduled to enter commercial service in June 2028 and will include a 300-megawatt (MW) power plant to support operations.
The deal forms part of Baghdad's response to worsening water scarcity in the south.
During construction, smaller desalination units will be deployed across Basra Governorate. These include the Shatt al-Arab station with a 5,000 cubic meter per hour capacity – equivalent to two Olympic pools per hour. The Al-Faw, Al-Siba, and Abu Flous plants will each produce 3,000 cubic meters per hour, while the Safwan plant will produce 1,000.
Beyond Iraq, China has expanded its infrastructure reach across West Asia through a series of state-backed investments in Saudi Arabia, Iran, and Turkiye.
In April 2025, Sinopec and Aramco Asia Singapore signed a $4 billion agreement to establish Fujian Sinopec Aramco Refining & Petrochemical Co., a joint venture to manage crude logistics at the Gulei Port zone in Zhangzhou.
The move supports Aramco's plans to supply up to one million barrels per day for downstream projects in China.
Between 2021 and October 2024, China became the largest source of greenfield FDI in Saudi Arabia, investing $21.6 billion—one-third of it in clean energy.
In Iran, total Chinese investment since 2007 remains under $5 billion. Projects include the Yadavaran oil field, Tehran–Mashhad railway, Qazvin tramway, a €1 billion ($1.09 billion) solar project, and a $350 million steel plant. Plans involving South Pars were scaled back under US pressure.
'Apart from the role played by state-backed investment, China's factory prowess has grown thanks to a number of factors ranging from Covid-era disruptions of supply chains to Beijing's planning and technological breakthroughs.' https://t.co/HsCH9QHxhh pic.twitter.com/2MetDXvg6D — Shehzad Qazi (@shehzadhqazi) July 25, 2025
In Turkey, China Sunergy, Talesun, Yingli, and NARI have established solar production facilities. China Sunergy alone has invested around $600 million in Istanbul for photovoltaic (PV) exports to Europe.
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PowerChina has secured a $4 billion contract to build Iraq's first large-scale seawater desalination plant in Basra, in partnership with local firm Al Ridha Group, Iraqi officials announced. Iraqi Prime Minister Mohammed Shia al-Sudani attended the groundbreaking ceremony on Thursday for the Basra Seawater Desalination Plant, a Chinese-built facility with a planned capacity of one million cubic meters per day. According to the premier's office, the project is scheduled to enter commercial service in June 2028 and will include a 300-megawatt (MW) power plant to support operations. The deal forms part of Baghdad's response to worsening water scarcity in the south. During construction, smaller desalination units will be deployed across Basra Governorate. These include the Shatt al-Arab station with a 5,000 cubic meter per hour capacity – equivalent to two Olympic pools per hour. The Al-Faw, Al-Siba, and Abu Flous plants will each produce 3,000 cubic meters per hour, while the Safwan plant will produce 1,000. Beyond Iraq, China has expanded its infrastructure reach across West Asia through a series of state-backed investments in Saudi Arabia, Iran, and Turkiye. In April 2025, Sinopec and Aramco Asia Singapore signed a $4 billion agreement to establish Fujian Sinopec Aramco Refining & Petrochemical Co., a joint venture to manage crude logistics at the Gulei Port zone in Zhangzhou. The move supports Aramco's plans to supply up to one million barrels per day for downstream projects in China. Between 2021 and October 2024, China became the largest source of greenfield FDI in Saudi Arabia, investing $21.6 billion—one-third of it in clean energy. In Iran, total Chinese investment since 2007 remains under $5 billion. Projects include the Yadavaran oil field, Tehran–Mashhad railway, Qazvin tramway, a €1 billion ($1.09 billion) solar project, and a $350 million steel plant. Plans involving South Pars were scaled back under US pressure. 'Apart from the role played by state-backed investment, China's factory prowess has grown thanks to a number of factors ranging from Covid-era disruptions of supply chains to Beijing's planning and technological breakthroughs.' — Shehzad Qazi (@shehzadhqazi) July 25, 2025 In Turkey, China Sunergy, Talesun, Yingli, and NARI have established solar production facilities. China Sunergy alone has invested around $600 million in Istanbul for photovoltaic (PV) exports to Europe.
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Fast-forward a month and Reuters is reporting on 'signs of strong demand more than offset the impact of a higher-than-expected OPEC+ output hike for August', not to mention now chronic worry about Trump's tariffs. In fact, after OPEC+ announced the bigger than expected supply boost, prices rose, not least because not everyone boosting supply was boosting it fast enough. When OPEC+ first said they were going to start unwinding their production cuts, agreed back in 2022, reactions were varied. Some argued it was all about trying to kill U.S. shale again. Others said the Saudis, the biggest cutter, simply had no other choice any longer after the cuts failed to produce significantly higher prices. Yet others claimed OPEC in general and Saudi Arabia specifically are trying to please Trump—by hurting some of his biggest donors. OPEC itself has not endorsed any of these versions of events. The fact remains that OPEC is reversing the cuts, boosting oil supply—but prices are not tanking as so many prominent energy analysts said they would, and are still saying they would, later this year. Of course, this is because of factors unrelated to OPEC, namely geopolitical developments such as U.S.-Chinese trade talks and Canadian wildfires, as well as yet more EU sanctions against Russia. But OPEC certainly wouldn't mind these factors supporting prices, if not more U.S. rig additions. OPEC is playing for market share. This is one of the most popular explanations for the group's latest moves among analysts. After curbing production for a couple of years and surrendering market share in the process, now some of the world's biggest producers want this market share back. This is going to take a while. Bank of America's head of commodities research, Francisco Blanch called it a 'long and shallow' price war. 'It's not a price war that is going to be short and steep; rather it's going to be a price war that is long and shallow,' Blanch told Bloomberg a month ago. He went on to say the target, especially for the Saudis, is U.S. shale, which has become more resilient in recent years but is still vulnerable to lower oil prices because of its higher costs. There is also another aspect to the change in OPEC approach, as detailed by Kpler's Amena Bakr. It's about group cohesion, Bakr wrote in an analysis for The National. With so much non-compliance with the cuts, those that were compliant needed to have their concerns addressed, too. 'To restore a sense of fairness, an orderly plan to return the barrels gradually was needed to avoid a free-for-all situation that would drown the market in supply,' Bakr explained. OPEC doesn't even need to try very hard this time, because geopolitics is working in its favor. 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This is just 25% of the average annual in new discoveries for the three years prior to 2020. In other words, all the talk about non-OPEC swamping OPEC and taking the upper hand on international oil markets may have been a little premature—as may be the case of IEA demand projections. The IEA has been notoriously bearish on oil demand, repeatedly citing rising EV sales, even though these sales in the U.S. are set for a serious decline. In Europe, EV sales are on the rise thanks to the return of subsidies but how long these are going to last is anyone's guess. China is always the country everyone points to when it comes to EVs, and yet China's oil demand is still growing—although peak talk is intensifying there as well, including from its own state oil majors. In this situation, OPEC essentially does not need to do anything but sit and wait. Price-sensitive U.S. shale will slow down, lack of new discoveries will crimp the growth potential of the supermajors, and prices will rise, because peak demand does not mean a sharp drop afterwards. In fact, even if we have reached peak oil demand, the most likely next stage in demand evolution is a plateau at a level that would need to be maintained. OPEC would no doubt be happy to help do that.
