Baghdad Mulling More Import of Iranian Gas

EghtesadOnline: Baghdad Governorate is discussing the prospect of raising gas import from Iran to ensure its power stations constantly run next summer, the secretary-general of Iran-Iraq Chamber of Commerce said.

News ID: ۷۸۱۵۳۸

27 January 2018

“Negotiations are underway and Baghdad Governorate has agreed to import [more] natural gas from Iran. Iraq’s Oil Ministry is interested in supplying gas to power plants and other Iraqi industries instead of petroleum products,” Hamid Hosseini was also quoted as saying by ISNA on Thursday.

Hosseini said the volume of deliveries is yet to be discussed, adding that the two sides are currently working to thrash out the general issues.

The official noted that as this is the first time Iran negotiates gas trade with Iraqi Oil Ministry, the talks are a sign of progress in the two countries’ cooperation, according to Financial Tribune.

"The talks would involve a new gas export deal as Baghdad is currently taking in Iranian gas under an agreement signed by the Iraqi Ministry of Electricity," Hosseini said without providing details.

About 12 mcm/d of gas per day are transferred to Baghdad, making Iraq the second largest gas customer of Iran after Turkey, which imported about 21 mcm/d in 2016, according to the latest BP Statistical Review of World Energy.

Iraq's second largest city Basra is also on the agenda to receive gas from Iran via another pipeline.

According to Hosseini, Iran-Iraq gas export contract is currently a six-year deal, but it can be extended.

Hamidreza Araqi, the managing director of state-run National Iranian Gas Company, told IRNA earlier this month that Iran's natural gas export to the city of Basra in southern Iraq can take place in March.

"Iraq has expressed its readiness to receive Iranian gas in Basra within two months … Shalamcheh border has been chosen as the gateway for up to 25 million cubic meters per day of gas export to Basra," he said.

Basra, as Iraq's economic capital, needs Iranian gas to feed its power plant as part of efforts to reduce outages that have turned into a persistent source of public discontent.

The Iraqi government approved a deal last month to import natural gas from Iran to the eastern border province of Diyala, increasing purchases of the Iranian fuel, which started in June after several years of delays.