Technopromexport Inspects Unfinished 1,260-Megawatt Youssifiah Thermal Power Plant in Iraq

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Researched by Industrial Info Resources (Sugar Land, Texas)--JSC Technopromexport (Moscow, Russia), a developer of turnkey power projects, has commenced a technological evaluation of three incomplete power generation units that were being developed by the firm for the 1,260-megawatt (MW) Youssifiah thermal power plant in Iraq. The firm had secured a contract to set up six 210-MW units as part of an intergovernmental agreement between Iraq and Russia signed in 1998. However, construction activities were stalled, and the firm had to evacuate its personnel three times on account of military actions in Iraq.

According to Technopromexport General Director Molozhavy V. Sergey, two groups of Russian specialists have been deployed at the site under military protection provided in part by the Iraqi army. The teams are currently inspecting the site, assessing the plant's equipment, and taking stock of construction and assembly work that has already been completed. The groups will also evaluate the condition of the facility, which came under repeated attacks. After technological studies are complete, the company will decide upon a set of new terms and conditions to be proposed to Iraq to complete the project.

The Youssifiah power plant was being developed within the scope of the United Nations' "Oil for Food" program. News reports published in June 2003 cite official announcements by Valentin Kuznetsov, then-chairman of the foreign economic department of Technopromexport, who said the firm was the first of all Russian companies to operate in Iraq before the war. According to Kuznetsov, the firm had already shipped four vessels loaded with cargoes worth $40 million-$45 million to Iraq for the construction of the Youssifiah project, which was to be the largest heating and electric power plant in the Persian Gulf. Technopromexport had continued to deliver equipment for the power plant in May 2003 and was slated to dispatch another vessel to Iraq.

Kuznetsov had visited the project site at the end of May 2003. Although the power station had not suffered from attacks, there had been several instances of theft of domestic appliances, such as refrigerators and air conditioners from the builders' settlement that was located about 100 meters from the construction site. Despite uncertainties brought about by the war at that time, Kuznetsov had declared that Technopromexport would accelerate the speed of construction of the project and deliver equipment worth $150 million to Iraq. However, in April 2004, the firm announced the withdrawal of its unit of 370 engineers working in Iraq following a spate of kidnappings in the country.

In August 2008, Iraq's Ministry of Electricity invited Russian firms to participate in tenders for the redevelopment of several electricity facilities in the country. The first among these projects was the reconstruction of the Kharta thermal power plant, a gas- and diesel-based power plant with a generation capacity of 400 MW. Technopromexport had won tenders to repair the Kharta power plant on three occasions: in 1997, 1999 and in 2007, when the value of the contract was estimated at $520 million-$600 million. The firm had indicated that it would resume work in Kharta, provided that Iraq addresses security issues and takes into consideration the increase in the cost of equipment and materials over the period of 18 months from 2007 to late 2008.

Iraq's power requirement in 2008 was estimated at 10,000 MW, with peak demand rising to 12,000 MW during summer. At that time, the country's existing plants had a generation capacity of only 5,500 MW. Recent reports indicate that the country's power output has reached 6,700 MW, about 2,500 MW higher than pre-war levels of power generation. Several large power projects that are scheduled for completion in the summer of 2009 are expected to provide an additional power generation capacity of 2,000 MW.

Iraq has entered into contracts with General Electric (NYSE:GE) (Fairfield, Connecticut) and Siemens AG (NYSE:SI) (Munich, Germany) for power projects with total generation capacity amounting to 15,000 MW. With the commissioning of these projects, the country expects to establish power supplies for an average of 12 hours per day for each household by June 2009 and around-the-clock power supply by 2011 or 2012. It is estimated that Iraq would require investments to the tune of $10 billion-$15 billion to restore its power sector.

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