Agenda Jeff Larkin OBE Director Power & Water, MENA Region PB Country Manager and Program Director, Iraq (2004 2011)
PBs Background in Iraq Challenges Opportunities Take Aways
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 Study Regulatory 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
Al Basrah Power: 22MW Shuaiba Power: 22MW Haditha Hydro Power: 105MW Dibis Power Plant: 45MW Buzurgan Power: 32MW Nasiriyia Power: 28MW Bayji Gas: 260MW Bayji Mobiles Plant: 120MW Al Ameen Substation 400kV Taji Substation Quds Power Plant: 180MW Taji Power Plant: 51MW Hilla Power Plant: 18MW Najaf Power Plant: 52MW Dibis-Erbil Overhead Line North Distribution: (43) RCI, WII Transmission National Control Generation Mosul East Power: 55MW Central Distribution RCI: (63) Distribution Khor Zubair Power: 246MW Key Benefits Increased Power Generation to 1.3M homes Improved 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 Transmission National Control Generation 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 Benefits Improved Power to Baghdad Ring Reduced Risk of Nationwide/Regional Blackout Increased Power Generation to 80K Homes Generate Over $10M/Month Oil Revenue Improved Electricity Distribution to over 362K Homes Maintain generation units Project Overview - Major Projects Completed 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 Projects Project Value DB Contractors, Cost Plus 35 $488M Direct Contracting 210 $852M Total 245 $1,340M Generation Distribution Key Benefits Reduce occurrence of blackouts; more reliable power Increased and Sustained Power Generation to 39K Homes Improved Electricity Distribution to 51K Homes Maintain generation units
Sustainment Projects Shuaiba 2: 21.5MW Project Overview - Major Projects Completed 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 and Kalar 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), and Fallujah Materials (11) Contracting Method Projects Project Value DB Contractors, Cost Plus 0 $0 M Direct Contracting 61 $415M Total 61 $415M Transmission National Control Iraq Elasticity Master Plan Recommended Plan - Capacity Installed Layout of the 400 kV Network during the Short Term Plan 400KV NETWORK IN 2015 Challenges Practical and logistics Business Models and Entry Contractual and Commercial Security 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 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 for investment into Iraq. There are a number of business support companies who can provide entry support and most of the security companies are moving into business support operations as the security market starts to diminish 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 own construction, 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 a local firm that offers synergies and develop a long term partnership to support and develop them 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
Challenges Security Terrorists organisations are still able to launch attacks at the centre of government - at will Threat of kidnapping has reduced, but could increase again Lack of stable government could, and is, leading to increased violence and reduced security
Working around ongoing military combat operations and coordinating with US Mil and ISF (CONOC) the local military 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 Iraqs Opportunities $27 Billion to Develop Electrical Sector (2008-2016)
Total (Millions) Activity
$15,540 New Steam Generation & Gas Turbine Generation Stations
$1,325 Rehabilitation of Existing Generation Stations
$9,730 New Transmission & Distribution Networks
$535
Rehabilitation of Existing Transmission & Distribution Networks Existing 2009 Kurdistan System Proposed 2015 Transmission System Layout of the 400 kV Network during the Short Term Plan 400KV NETWORK IN 2015 Estimated Overall Investment Cost (US$ millions) Short Term Long Term 2011-15 2016-20 2021-25 2026-30 TOTAL Generation 5,000 11,101 10,269 10,800 37,170 Transmission (1) 4,002 1,387 1,844 2,633 9,866 Distribution Rehab 8,549 8,549 Distribution - Expansion 4,644 3,910 5,132 7,699 21,385 TOTAL 22,195 16,398 17,245 21,132 76,970 Per Year: 3,849 (1) Scenario C with Thermals Base load forecast 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 3 2 1 4 5 GE Megadeal Sites
The ME has purchased 6 X V94.3 and 10 x V94.2 Siemens gas 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 2 1 3
IQ5PP Sites
1 - Bayji (Salah ad Din) 2 - Taza (Kirkuk) 3 - Sadr City (Baghdad)
Iraq seeks IPPs to Build/Own/Operate plants
Eight sites utilizing equipment purchased from GE & Siemens:
The ME & the National Investment Commission have issued an invitation for proposals; see www.investpromo.gov.iq or contact 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 Take Aways. A lot has been done already and it is possible to operate safely in 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
Thank you Jeff Larkin Parsons Brinckerhoff Abu Dhabi larkinj@pbworld.com