China signs $2.5bn seawater contract to sustain Iraq’s oil output
The Cradle | September 23, 2025
China Petroleum Pipeline Engineering (CPPE) has secured a $2.5 billion contract to design and build a massive seawater distribution system across southern Iraq, Iraq Business News (IBN) announced on 23 September.
The agreement with Iraq’s Basra Oil Company covers a 950-kilometer network that will deliver treated seawater to multiple fields, with Australian consultancy ILF tasked with supervising the works.
The project centers on a treatment plant built to handle five million barrels of treated seawater each day, with future phases allowing the volume to increase to seven to eight million.
The treated seawater will be pumped into the reservoirs of Rumaila, Zubair, West Qurna 1 and 2, Majnoon, and other fields in Maysan and Dhi Qar to keep underground pressure high, which allows the crude oil to be more easily extracted.
The pipeline will also help protect freshwater sources that are currently being diverted from rivers and aquifers, which will instead remain available for use in agriculture and households.
The scheme forms a central pillar of Iraq’s Common Seawater Supply Project, first outlined as part of wider efforts to stabilize crude output.
It also links with other ventures such as TotalEnergies’ expansion at the Artawi (Ratawi) field, where output is targeted to rise to 210,000 barrels per day (bpd).
China National Petroleum Corporation had disclosed in August that its subsidiary, CPPE, was the winning bidder, with the contract awaiting final signature. The company stated that execution would commence after the contract was signed, with a duration of 54 months.
China has steadily deepened its position in Iraq’s energy sector.
Senior executives from four Chinese oil firms told Reuters in August that their collective production in Iraq is set to double by 2030, reaching half a million bpd.
Baghdad has also invited Beijing to anchor other strategic initiatives. In 2023, Iraq’s transport minister said China was expected to play a major role in the $17 billion Development Road linking West Asia to Europe.
In July, PowerChina was awarded a $4 billion contract for Iraq’s first major seawater desalination facility in Basra, reinforcing Beijing’s growing weight in Iraq’s reconstruction and resource management.
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