Egypt's Orascom Bags $363 Million Iraq Power Project

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Orascom Construction Industries (PINK:ORSCY) (OCI) (Cairo, Egypt) has formally signed the $363 million contract to build a 1,014-megawatt (MW) power station in Baija, Iraq. This follows the approval given for the project by the Iraqi cabinet in January 2012. Baija is home to Iraq's largest oil refinery and a fertilizer plant, and is a major rail junction.

The plant will generate power from six Siemens (NYSE:SI) 169-MW gas-fired units that Iraq bought in a package deal in 2008. The project is scheduled for completion within 21 months.

The Baija project is part of the $15 billion investment Iraq plans to make in the power sector through 2015 to increase installed generation capacity by 20,000 MW to 27,000 MW.

The additional generating power will consist of 13,000 MW of gas-fired projects and 7,000 MW of thermal power plants. Currently, power available on the grid is a bit more than 7,000 MW but is expected to increase up to 9,500 MW as new projects and upgrades are commissioned this year. In 2011, peak demand reached 15,000 MW, resulting in low availability and chronic blackouts.

Earlier this year, OCI made a strategic decision to target Iraq's infrastructure development program and make it a key focus of the group. OCI has established a permanent branch in Baghdad to facilitate the pursuit of other major projects in the country's program, specifically in power generation, water, wastewater, hospitals and large-scale oil and gas industry projects.

OCI's long-term presence in Iraq is expected to create significant job opportunities and training for local Iraqis and to create indirect jobs for Egyptian labor.

OCI is one of Egypt's largest corporations, employing more than 84,000 people in 35 countries. OCI fertilizer group owns and operates nitrogen fertilizer plants in Egypt, the Netherlands, the U.S. and Algeria, and ranks among the top global fertilizer producers with a capacity that will exceed more than 7 million tons in 2012.

For related information see April 25, 2012, article - Siemens Consolidates Iraq Power Plant and Transmission Control Contracts.

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