Fertilizer Plants in Iraq: Rebuilding Agriculture Between Two Rivers
Iraq is a smaller fertilizer market than Saudi Arabia, but it has a genuine agricultural rebuild under way and the gas to feed it. Wheat self-sufficiency has held for several seasons, date palm numbers have nearly doubled since 2003, and the country flares enough associated gas to supply new ammonia and urea plants. This article covers that rebuild, the gap in domestic fertilizer supply, the projects trying to close it, and where granulation and drying equipment fits.
A farming rebuild under water stress
Iraq harvested a record 6.3 Mt of wheat in 2024/25 and declared wheat self-sufficiency again in 2026. The Ministry of Agriculture says the country needs up to about 5 Mt a year, and it now also reports self-sufficiency in dates. Agriculture is a modest part of the economy, at about 3.4% of GDP, but it employs about 8% of the workforce.
| Season | Wheat harvest |
|---|---|
| 2025/26 | Up to about 5 Mt expected; self-sufficiency declared in September 2026 |
| 2024/25 | 6.3 Mt, a record and 21% up on the year before |
| 2023 | 5.3 Mt |
| 2021 | About 4.2 Mt |
| 2020 | 6.2 Mt |
| 2019 | 4.7 Mt |
The gains are fragile. Around 70% of wheat is grown on irrigated land, and Iraq depends on the Tigris and Euphrates, with an estimated 70% of its water originating outside its borders. In earlier drought years, harvests fell sharply, so fertilizer demand here tracks water availability as much as price.
Other crops are part of the rebuild too. Iraq’s date palm count has risen from about 12 million after 2003 to 22 million in 2026, according to the Ministry of Agriculture. In October 2025, the agriculture minister said Iraq was self-sufficient in 13 farm products and had begun exporting crops such as dates and potatoes to Gulf states and Europe.
The pressure point is cost. In May 2026, the state cut its wheat procurement price to 700,000 dinars (about USD 535) per tonne while input costs stayed high, which squeezes farm margins. Locally made fertilizer at a stable price would ease that pressure.
Gas: the feedstock Iraq has been burning
Iraq is the world’s third-largest gas flarer, burning 17.7 billion cubic metres in 2023 according to the World Bank. That associated gas comes out of oil wells, mostly in Basra province, and is exactly the feedstock ammonia and urea plants need. Baghdad aims to eliminate routine flaring by 2028, and the Oil Ministry says it has already raised associated gas capture from 53% to 70%.
| Gas capture project | Partners | Scale or status |
|---|---|---|
| Basrah Gas Company | Shell, Mitsubishi and state-owned South Gas Company | Captures gas from Rumaila, Zubair and West Qurna-1; new BNGL units of 200 mmscfd each |
| Gas Growth Integrated Project (Ratawi) | TotalEnergies, QatarEnergy and Basra Oil Company | 600 mmscfd of associated gas capture |
| Halfaya Gas Project, Maysan | Listed in the Oil Ministry's gas programme | 300 mmscfd; recently brought online |
| Nahr Bin Umar, Basra | Listed in the Oil Ministry's gas programme | 300 mmscfd |
| Nassiriyah and Gharraf | Listed in the Oil Ministry's gas programme | 200 mmscfd; start-up targeted for Q1 2027 |
Until now, most captured gas has gone to power generation, and industrial gas demand has been small, led by cement. As capture grows, gas-based industries such as fertilizer become a realistic use for it. Iraq’s Ministry of Industry set out a plan in 2018 to raise urea capacity to 6.2 Mt per year by 2035, with candidate ammonia and urea sites at Khor Al-Zubair, Baiji and Al-Qaim.
Policy measures and what they signal
The Cabinet-approved winter agricultural plan for 2026/27 supports farmers directly and changes how fertilizer is bought in this Middle Eastern powerhouse. It includes a wheat purchasing target of up to 4 Mt, subsidised seed and pesticides, and two fertilizer measures. Industry press has also reported Cabinet approval of protective measures for domestically produced urea, so policy pulls in more than one direction.
| Measure | What it does | What it may mean for plant planning |
|---|---|---|
| Suspension of the extra 35% urea import duty until 28 February 2027 | Lowers the landed cost of imported urea in the near term | Short-term support for farmers, but less price protection for domestic producers |
| Direct purchase of DAP by the Ministry of Agriculture | Removes intermediaries and concentrates buying in one state buyer | Could give a domestic DAP producer a clearer route to market, depending on how the programme runs |
| Wheat purchasing target of up to 4 Mt | Supports farm incomes and planted area | Supports demand for nitrogen and phosphate on irrigated wheat |
Domestic fertilizer production and new projects
Iraq’s fertilizer supply has historically come from a few state-owned plants. In the mid-2000s, the plants at Khor Al-Zubair and Baiji together supplied roughly 500,000–700,000 t of urea a year, according to a JICA project document; current output may differ. Several projects now aim to close the gap, most of them led by private investors.
| Project | Product | Stated capacity | Status and timing |
|---|---|---|---|
| KEPPT, Basra | Ammonia and urea | 1.15 Mt/yr of urea; KBR front-end design covers a 2,300 t/d ammonia unit and a 3,850 t/d urea unit; about USD 1.6 billion | J.P. Morgan appointed in July 2026 to arrange financing with export credit agencies; construction from 2027, operations expected in 2030 |
| AAA Holding Group, Khor Al-Zubair | DAP | A new 500,000 t/yr line, taking the plant to 1 Mt/yr | Announced; commissioning date not confirmed |
| ECEC (China), phosphate complex | Phosphate fertilizers | About USD 2 billion | Reported in January 2026; details limited |
| ARJ Holding (UAE), Baiji | Compound fertilizer | Not stated in the sources reviewed | Contract reported |
KEPPT’s plant would be Iraq’s second operating urea facility. The company says it aims to reduce import reliance, ease domestic price pressure and support farming, and its Basra site sits close to the gas being captured from the southern oilfields.
Timing and risk
The new projects run on long timelines, with KEPPT’s urea plant not expected to operate until 2030. Gas supply depends on capture projects that have slipped before, such as Nassiriyah and Gharraf, now targeted for 2027. Regional conflict in 2026 disrupted Gulf shipping, and Basra’s import and export routes run through the Gulf, so schedule risk is real. Because the planned Basra urea plant is aimed at the domestic market, it depends less on export routes than the large Gulf export plants do.
Where equipment decisions come in
Iraq has the strongest greenfield case for granulation and drying equipment in this series. It has little existing downstream capacity, a farm sector that is growing again, and several projects aimed at the domestic market. The equipment questions differ by project type:
| Project type | Typical equipment questions | Relevance of granulation, drying and blending equipment |
|---|---|---|
| Urea (such as the KEPPT plant) | Urea synthesis and product finishing, usually specified by the technology licensor | Limited |
| DAP (such as the Khor Al-Zubair expansion) | Slurry granulation, drying, cooling and screening | Directly relevant; see our diammonium phosphate process page |
| Compound or NPK (such as the Baiji project) | Granulation method, dryer and cooler sizing, screening and recycle handling, blending | Directly relevant |
For the DAP and compound fertilizer projects, the choices come down to drum or pan granulation, drying and cooling capacity matched to throughput, screening and size reduction, and recycle handling. These are the areas Ceylan Machine & Process works in. We do not know which equipment suppliers have been selected for any of these projects, so this describes the questions they will need to answer, not a claim about any particular plant.
Frequently Asked Questions
Why is Iraq investing in fertilizer production?
Iraq has rebuilt its wheat production to self-sufficiency levels, but it still relies heavily on imported urea and DAP. Domestic plants would reduce import reliance, stabilise fertilizer prices for farmers and make use of gas that is currently flared.
Is Iraq self-sufficient in wheat?
Yes, according to the Ministry of Agriculture, which declared wheat and date self-sufficiency again in September 2026. Iraq harvested a record 6.3 Mt of wheat in 2024/25, and the ministry says the country needs up to about 5 Mt a year.
How does gas flaring relate to fertilizer in Iraq?
Ammonia and urea are made from natural gas. Iraq is the world’s third-largest gas flarer, burning 17.7 billion cubic metres in 2023, and it aims to end routine flaring by 2028. As more of that gas is captured, it becomes available as feedstock for fertilizer plants.
What is the KEPPT urea plant in Basra?
It is a planned USD 1.6 billion plant that would produce 1.15 Mt of urea a year, making it Iraq’s second operating urea facility. KBR completed the front-end design, J.P. Morgan was appointed in July 2026 to arrange financing, construction is scheduled to start in 2027 and operations are expected in 2030.
What other fertilizer projects are planned in Iraq?
They include a new 500,000 t/yr DAP line at Khor Al-Zubair by AAA Holding Group, a reported USD 2 billion phosphate complex by China’s ECEC, and a compound fertilizer project in Baiji contracted to UAE-based ARJ Holding.
How does water scarcity affect fertilizer demand in Iraq?
About 70% of Iraq’s wheat is grown on irrigated land, and an estimated 70% of its water comes from outside its borders. In drought years, planted area and harvests can fall sharply, so fertilizer demand follows water availability as closely as it follows price.