Dubai — Siemens expects to reach a final investment decision on phase one of its Iraq roadmap to rebuild the country's power infrastructure, according to the CEO of the company's Middle East unit.
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"This year in total we have added 700 MW of capacity to the Iraqi grid under existing contracts, contracts we are executing under the contract," Dietmar Siersdorfer, the CEO of Siemens Middle East, told S&P Global Platts Monday in an interview in Abu Dhabi. "We have started work on [phase one projects] but we are looking for FID now within the next days or weeks."
Siemens' Iraq roadmap consists of three phases of development, totaling 11GW of electricity capacity. The industrial equipment maker is in talks with several Iraqi government entities over the budget for phase two, which will go ahead next year, Siersdorfer said.
Central to the Iraqi roadmap is the use of Iraqi resources to rebuild Iraq and reduce dependence on neighbors, including reducing flaring and using gas for power generation. Siemens estimates that the amount Iraq flares in natural gas could cover the entire country's electricity needs.
At the moment, about 19% of Iraq's total gas-fired power consumption is fueled through an interconnection from US-sanctioned Iran. Iraq has promised to reduce its reliance on Iran's energy in exchange for leniency over its power imports.
"In the initial roadmap, it was an essential part that we connect the grids from Kuwait to Iraq," Siersdorfer told Platts. "We even discussed at the time, and it is still part of the roadmap at a later stage, that we connect with a [high-voltage direct current] line, so we can use the surplus power that we can generate in Kuwait and bring it to Iraq and the northern areas."
The timeline for when the Kuwait-Iraq connection will be prioritized depends on a framework approved by Iraq's energy minister Luay al-Khateeb, who decides which part of the Siemens framework should be implemented first, Siersdorfer said.
At the moment, Siemens is working in some 26 sites across Iraq, including in areas recently liberated from Islamic State militants. In light of ExxonMobil's decision to remove some of its staff from its Iraqi operations, Siersdorfer said there were no particular signs of increased security concerns and that Siemens is committed to the country and also to the security of its staff.
Elsewhere, Siersdorfer was bullish on power projects demand in the Middle East region, but said that "volatile geopolitics" meant it was difficult to pinpoint which market would have the most growth potential.
"We are bidding in the UAE, Saudi Arabia is a very interesting market...and countries like Libya have to be rebuilt, so let's see," Siersdorfer said. "We can have predictions but the volatile situation in geopolitics at the moment means it's not [clear] where really the [interesting market] is next year."
The company is also focused on Lebanon, which is beginning to implement an overhaul of its energy sector to tackle a worsening electricity crisis. Siemens is involved in the country's bidding process, he said.
--Miriam Malek, email@example.com
--Edited by Claudia Carpenter, firstname.lastname@example.org