Natural Gas Exports to Iraq on Downward Slope: NIGC

EghtesadOnline: The National Iranian Gas Company has reduced natural gas exports to Iraq by 15% in the last two weeks, the head of NIGC’s Dispatching Department said.

News ID: ۷۸۶۹۵۶

05 September 2021

“The reduction in gas exports has nothing to do with Iraq’s unsettled debts to NIGC,” Mohammad Reza Joulaei was also quoted as saying by ISNA.

Although Iraq’s debt to NIGC has surpassed $5 billion, the recent export cut that is supposed to continue for six months is based on the terms of an agreement signed with the Arab neighbor in 2020, he added.

According to the official, Iraq received close to 45 million cubic meters of gas from Iran daily till August 15, but NIGC’s daily export since then reduced to 38 mcm and this will continue over the next six months.

“Although plans had been made to help Iraq settle its massive debts through monthly installments, the war-ravaged country has fallen short of clearing its outstanding debts,” he said.

Iraq has lost 2.6 gigawatts of power generation due to lower Iranian gas imports, the Iraqi electricity ministry said on Sept. 1, as OPEC's second-biggest producer continues to suffer from intermittent energy supplies from Tehran.

“Iranian electricity exports to Iraq have also been suspended due to domestic power shortages,” Mostafa Rajabi-Mashhadi, the spokesman of Iran Power Generation, Distribution and Transmission Company (Tavanir), was quoted as saying by IRNA.

In 2020, Iran exported around 2 GW of electricity, but that volume has dropped this year to 150 megawatts due to domestic needs, he added.

Iranian intermittent supply of gas and electricity has led to widespread shortages in Iraq this summer, when the temperature soared to 50 degrees Celsius, especially in the south.

Adding to Iran's outage is the difficulty the cash-strapped and politically-hobbled Iraq is facing in paying billions of dollars of dues to Tehran, which has been under US sanctions since 2018, which also complicates Baghdad's ability to settle its arrears without the threat of financial repercussions.