China's growing footprint in Iraq's energy sector fuels development and new hope

Iraqi News

23-05-2025

Baghdad (IraqiNews.com) – Iraq, a nation endowed with vast oil and gas reserves, is witnessing a significant transformation in its energy landscape, increasingly powered by strategic partnerships with Chinese corporations. From harnessing previously flared natural gas to ambitious plans for boosting crude oil output, these collaborations are not only reshaping Iraq's energy infrastructure but also bringing tangible improvements to daily life and fostering new economic hope.
The Halfaya Gas Project: Turning Waste into Watts and Well-being In Maysan governorate, southern Iraq, the $1 billion Halfaya Gas Processing Plant, an investment by PetroChina Halfaya and executed by China Petroleum Engineering and Construction Corporation (CPECC), stands as a powerful symbol of this change. Operational since mid-2024, it tackles the long-standing issue of flaring associated gas from oil fields. This captured gas, once a pollutant, now provides cleaner energy, crucial as Iraq navigates regional energy pressures, including those related to previous electricity import arrangements.
The plant processes approximately 3 billion cubic meters of associated gas annually, producing enough treated natural gas to generate electricity for an estimated 4 million Iraqi homes. For residents like Haider, a local farmer, this means reliable power. 'This blue flame is like the genie in Aladdin's lamp,' he remarked, 'cooking is easier, and we no longer fear frequent power cuts… we got back our dignity.' Beyond electricity, Halfaya yields vital by-products like 860,000 tons of LPG annually, distributed locally, and other hydrocarbons. Zainab, an engineer at the facility, shared, 'We used to flare gas day and night, feeling like we were throwing our future away. Now, it's a golden resource.' The project, inaugurated by Prime Minister Mohammed Shia Al Sudani, is also mindful of its proximity to the UNESCO-protected Hawizeh Marshes, with PetroChina committed to ongoing environmental monitoring and green development.
China's Expanding Role: Fueling Iraq's Future Oil Ambitions This partnership extends deep into Iraq's oil sector. Under a 2019 'Oil for Reconstruction and Investment' agreement, Chinese firms are pivotal to Iraq's ambitious goal of increasing oil production towards 7 million barrels per day (bpd) from its current ~4 million bpd. A recent example is the deal with China's Geo-Jade Petroleum to expand the Al-Tooba oil field, which includes building a 200,000 bpd refinery, two power plants (one conventional 650MW, one 400MW solar), a petrochemical facility, and a fertilizer plant.
Oil Minister Hayyan Abdul Ghani lauded such projects as a 'major leap' for developing Iraq's oil wealth and supporting the national economy with thousands of jobs. Indeed, Chinese companies already manage a significant portion – reportedly up to two-thirds – of Iraq's oil production and over a third of its proven reserves.
Strategic Implications and the Road Ahead These large-scale collaborations offer dual benefits: Iraq gains critical infrastructure, enhances its energy self-sufficiency, and moves towards economic diversification, while China secures vital energy supplies and expansive investment avenues. For Iraq, it's a path towards leveraging its natural resources more effectively, reducing waste, and improving the lives of its citizens.
As Jiang Feng, CPECC's Middle East General Manager, stated about Halfaya, such projects are not just 'engineering achievements but models of sustainable development,' bringing leading Chinese technology and environmental responsibility. This synergy, exemplified by the Halfaya plant powering homes and the broader plans to develop downstream industries, underscores a transformative era for Iraq's energy sector, heavily influenced by Chinese investment and expertise.