Iraq has signed a $450 million investment agreement with U.S.-based Excelerate Energy to establish the country’s first floating storage regasification unit (FSRU), marking a key step in expanding its energy infrastructure and attracting more foreign investment. The project will be located at the port of Khor al-Zubair and will allow Iraq to import, store, and convert liquefied natural gas (LNG) into gas for integration into its national power grid, according to two Iraqi energy officials familiar with the deal. The Iraqi Prime Minister’s office confirmed the signing in a statement on Tuesday, without releasing further details.

Excelerate Energy stated separately that the total investment value of the project is estimated at about $450 million, including the cost of the company’s newest FSRU vessel currently being built in South Korea. The unit is designed to provide a regasification capacity of up to 500 million standard cubic feet per day (MMscf/d). Under the five-year agreement, which includes extension options, Excelerate will deliver both regasification services and LNG supply, with a minimum contracted offtake of 250 MMscf/d.

The new terminal is expected to enhance Iraq’s ability to secure reliable gas imports and diversify energy inputs to its power generation system. Once completed, it will become a significant addition to Iraq’s gas infrastructure, reducing its dependence on pipeline imports and supporting the country’s broader goal of achieving stable power generation capacity.

The deal reflects Iraq’s strategy to strengthen cooperation with international energy companies and attract investment from U.S. firms. Excelerate Energy’s involvement underscores growing private sector participation in Iraq’s energy sector, which the government hopes will bring advanced technology, improve efficiency, and help meet domestic energy demand.

In recent years, Iraq has faced challenges in maintaining consistent energy supplies due to fluctuating imports and infrastructure constraints. Washington has encouraged Baghdad to diversify its energy sources to reduce potential supply disruptions. The new agreement aligns with Iraq’s plan to expand access to liquefied natural gas as an alternative energy input, ensuring greater flexibility in energy management.

Excelerate Energy operates a global fleet of FSRUs and has experience developing similar projects in Asia, the Middle East, and Europe. The company said the upcoming unit will be one of its most advanced vessels, equipped with high-capacity systems to ensure continuous operations and environmental compliance.

The partnership is expected to contribute to Iraq’s long-term energy security goals by improving access to natural gas and supporting industrial and power sector growth. The agreement also reflects Iraq’s commitment to modernizing its energy infrastructure through international cooperation and technological advancement.

Meanwhile, Russia’s second-largest oil producer, Lukoil, announced on Monday its plan to sell international assets, signaling further restructuring in the global energy market.