Iraq’s $27bn GGIP deal with TotalEnergies and QatarEnergy: Can flared gas, seawater and solar finally fix its power crisis?

Iraq has taken a decisive step in reshaping its energy sector, finalizing a new phase of the Gas Growth Integrated Project (GGIP) with TotalEnergies SE (NYSE: TTE; EPA: TTE), QatarEnergy LNG and the state-owned Basra Oil Company. The agreement, signed over the weekend, also ropes in major Asian contractors, including Turkey’s ENKA İnşaat ve Sanayi A.Ş. (BIST: ENKAI), China Petroleum Engineering & Construction Corporation, and Hyundai Engineering & Construction Co., Ltd. (KRX: 000720). Collectively, the program aims to cut flaring, recover gas for domestic power generation, maintain reservoir pressure through seawater injection, and build renewable energy capacity in the Basra region.

The joint operation agreement for the Artawi oilfield locks in a consortium structure with TotalEnergies holding 45 percent, Basra Oil Company at 30 percent, and QatarEnergy at 25 percent. This equity split was originally devised when Iraq revived the GGIP framework in 2023 after years of delays, and its formalization provides a durable foundation for execution. For Iraq, the deal demonstrates renewed investor confidence, while for TotalEnergies and QatarEnergy it cements long-term access to both upstream oil and integrated gas monetization opportunities in one of the Middle East’s most resource-rich jurisdictions.

Why is Iraq tying flared gas recovery, seawater injection and a Basra solar park into one giant integrated blueprint now?

The integrated design of GGIP reflects Iraq’s unique set of challenges. The country has consistently ranked among the world’s top gas flarers, wasting billions of cubic meters annually. Capturing and processing this gas provides two simultaneous benefits: reducing emissions and producing domestic fuel to ease chronic electricity shortages. Iraq has historically imported gas and power from Iran, a dependency that strains its budget and exposes it to geopolitical risk. By converting wasted associated gas into baseload generation, Iraq can substitute imports with local supply, strengthening energy security and stabilizing the grid.

At the same time, Iraq’s mature oil reservoirs face natural decline. Maintaining reservoir pressure through water injection is critical to sustaining production. The Common Seawater Supply Project, designed to deliver an initial five million barrels of seawater per day, offers a scalable solution that avoids tapping Iraq’s scarce freshwater resources. Coupling this with a 1.25-GW solar complex in Basra provides a renewable counterbalance, reducing the need to burn valuable hydrocarbons for electricity during peak demand periods. Taken together, the three pillars of GGIP—gas capture, seawater injection and solar—form a pragmatic transition strategy that prioritizes energy security while aligning with global decarbonization trends.

What exactly was signed this weekend, and how does it accelerate Iraq’s energy build-out?

The package of agreements moves GGIP from paper commitments to execution. The joint operation agreement between TotalEnergies, QatarEnergy and Basra Oil Company secures governance for the Artawi oilfield. ENKA İnşaat will construct a central processing facility capable of handling 210,000 barrels of oil per day and 163 million standard cubic feet of gas per day, while China Petroleum Engineering & Construction Corporation has been tasked with building a gas processing facility capable of handling 600 million standard cubic feet per day. Hyundai Engineering & Construction will construct a seawater treatment plant with a maximum capacity of 7.5 million barrels per day, which will serve as the backbone of the Common Seawater Supply Project.

These engineering, procurement and construction (EPC) contracts are more than symbolic. They represent the point at which equipment is ordered, local labor mobilized and commissioning timelines locked. Iraq’s leadership emphasized that the signing also marked the start of the second phase at the Artawi oilfield, which targets raising oil output toward 210,000 barrels per day once fully operational. By integrating processing, injection and power solutions, Iraq is attempting to avoid the project slippage that has characterized earlier attempts to modernize its energy infrastructure.

How big is the financial scale of GGIP, and why do numbers range from $10 billion to $27 billion?

The financial scope of the Gas Growth Integrated Project has been a source of confusion, with figures ranging from $10 billion to $27 billion depending on scope and accounting methodology. When TotalEnergies originally signed the agreement in 2021, it described a $10 billion multi-energy project. Iraqi officials, however, have consistently pitched the package as a $27 billion investment once solar capacity, seawater treatment, gas monetization, and oilfield development are counted together.

For investors, the precise number matters less than the phasing of capital outflows and the commissioning schedule. The early gas treatment units, expected to capture 50 million standard cubic feet per day in their first phase, are relatively modest investments that can deliver tangible results quickly. Larger infrastructure, such as the seawater plant and solar project, will require billions in capital but also unlock longer-term returns. The key metric for markets will be how quickly new gas volumes are processed and substituted for imports, as well as the pace at which the solar project displaces hydrocarbon-fired generation.

What are the key risks that could delay or derail the Gas Growth Integrated Project?

Despite strong political backing, Iraq’s execution risk remains high. The country has struggled with bureaucratic bottlenecks, corruption concerns and security instability that can complicate logistics. Large-scale seawater injection projects are technically challenging, requiring complex pumping systems, corrosion-resistant piping, and careful integration with multiple oilfields. Gas processing plants must meet international standards to be bankable, which requires sustained oversight and quality control.

Cost inflation and foreign exchange volatility also pose risks. Iraq will rely on international partners for equipment and expertise, and global supply chain pressures could raise costs or delay deliveries. Moreover, ensuring that Iraq’s transmission grid can absorb new capacity is essential. Without complementary investments in power distribution, gas and solar additions may not translate into improved electricity access for households and industries.

Will these deals finally reduce Iraq’s chronic summer power outages and cut its dependence on Iranian imports?

The credibility of the Gas Growth Integrated Project will be measured by results on the ground. TotalEnergies began construction of an early gas treatment unit in January 2025, with a first-phase target of 50 million standard cubic feet per day. When scaled, this could fuel about 1.5 gigawatts of power capacity. Adding 600 million standard cubic feet per day of processing capacity through the CPECC facility would represent a significant step change, directly offsetting imported gas volumes. The 1.25-GW Basra solar complex, meanwhile, is scheduled to roll out in tranches between 2025 and 2027, targeting enough generation to power around 350,000 homes.

While no single project will solve Iraq’s chronic outages, the integrated nature of GGIP provides a realistic path to incremental improvement. Domestic gas can reduce import dependency, solar can smooth peak demand, and seawater injection can sustain oil revenues that fund the national budget. If these elements come online as promised, Iraq could materially reduce blackouts and stabilize its energy balance within the next three years.

How are publicly listed partners and contractors positioned, and what is the current market sentiment?

Investor response to the announcements has been cautiously optimistic. TotalEnergies SE’s American depositary receipts last closed at $61.14, slipping about 0.4 percent into the weekend. The muted movement reflects a balanced market view: investors recognize the long-term optionality of the Iraqi projects but are wary of execution risk and political volatility. Analysts largely characterize the stock as a hold, with an opportunity to accumulate on dips for investors willing to wait for commissioning milestones.

ENKA İnşaat shares on the Istanbul exchange have been trading in the high-₺60s, maintaining a steady range despite broader Turkish market volatility. The central processing facility contract provides valuable backlog visibility, which generally supports contractor valuations, although currency risks in Turkey remain a limiting factor. Hyundai Engineering & Construction shares have seen a mixed outlook in Seoul, with brokers weighing the benefits of new overseas EPC contracts against broader project risk discounts. The Iraqi seawater plant contract enhances Hyundai’s Middle East portfolio, suggesting upside potential if order intake continues to rise.

Institutional flows remain cautious, with foreign investors maintaining exposure but not aggressively increasing positions until tangible commissioning progress is evident. This conservative stance mirrors broader sector sentiment, where geopolitical uncertainty and OPEC+ policy shifts have exerted greater influence on oil and gas equities than individual project announcements.

What is the broader regional and global significance of Iraq’s new energy strategy?

Regionally, the Gas Growth Integrated Project represents a template for hydrocarbon economies under pressure to reduce flaring and diversify energy sources. By bundling gas capture, water injection, and solar power into a single integrated framework, Iraq is positioning itself as a test case for pragmatic energy transition in the Middle East. Other countries with high flaring rates, such as Algeria, Nigeria and even parts of the Gulf, could adopt similar models to balance decarbonization with energy security.

Globally, the project reinforces several investment themes. Oil majors like TotalEnergies are increasingly coupling hydrocarbon projects with renewable components to satisfy environmental, social and governance criteria, while state-backed firms like QatarEnergy use their balance sheets to secure long-term partnerships. Asian contractors continue to cement their role as indispensable players in Middle Eastern energy infrastructure, gaining project experience and expanding their market share.

For Iraq, success would mean a measurable reduction in gas flaring, an improvement in domestic electricity supply, and a stabilization of oil output that underpins government revenues. For the wider energy transition, it would provide a rare example of an oil-rich state leveraging hydrocarbons to finance renewable infrastructure while reducing emissions.

Where does the Gas Growth Integrated Project go from here, and what should stakeholders monitor?

The future of GGIP hinges on timely commissioning. Three milestones will determine whether the project succeeds. The first is the completion of ENKA’s central processing facility, which will unlock liquids and sweet gas volumes. The second is the ramp-up of CPECC’s gas processing plant to its full 600 million standard cubic feet per day capacity, which would be visible in reduced imports and improved grid reliability. The third is the commissioning of Hyundai’s seawater treatment plant and associated pipelines, which will be essential for maintaining oilfield productivity.

In parallel, the roll-out of the Basra solar project will test Iraq’s ability to deliver utility-scale renewables. The first 300 to 500 megawatts will act as a litmus test for domestic EPC capability and grid readiness. If these benchmarks are met, Iraq will not only improve its domestic energy system but also set a precedent for integrated transition projects in resource-dependent economies.