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Iraqi Official Hopes to Import More Gas From Iran

By Orkhan Jalilov April 2, 2021

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Last December, Iran has reduced gas supplies to Iraq to 22 mcm per day from nearly 50 mcm over arrears of more than $6 billion. / Financial Tribune

A spokesman for the Iraqi Ministry of Electricity has expressed hope that the Iranian authorities would supply gas needed for Iraqi power plants. In the meantime, the United States has granted Iraq the maximum extension to a sanctions waiver, allowing Baghdad to import electricity and gas from Tehran.

“Baghdad is looking for a restoration of nearly 28 million cubic meters (mcm) per day of lost gas supplies from Iran as the ministry prepares for a hot summer when demand for power peaks in the country,” Ahmad al-Abadi, the spokesman for the Iraqi Ministry of Electricity told reporters, according to a report by Iran’s Press TV.

Last December, Iran has reduced gas supplies to Iraq to 22 mcm per day from nearly 50 mcm after the National Iranian Gas Company (NIGC) announced it was halting supplies to neighboring Iraq over arrears of more than $6 billion.

Abadi further said that Iraq would bring online three power plants within the next months to reach an electricity production capacity of 22 gigawatts (GW). Iraq currently can generate only around 19 GW because of its inefficient grid, and it is far below the actual demand for power in households and industries in the country.

On March 31, the United States has renewed a waiver allowing Iraq to pay for electricity imported from Iran, giving Baghdad 120 days to reduce its energy dependence on Tehran. The waiver was renewed despite U.S. sanctions imposed after former U.S. President Donald Trump pulled out of the 2015 nuclear deal between Iran and world powers.

Washington has issued regular waivers to Iraq since it reimposed sanctions, but last year shortened their length to encourage the country to reduce its use of Iranian energy. The extension was the first under US President Joe Biden’s administration, who has changed the country's tone regarding the nuclear deal and is now trying to re-enter diplomacy with Iran over returning to the nuclear deal.

“The waiver ensures that Iraq is able to meet its short-term energy needs while it takes steps to reduce its dependence on Iranian energy imports,” Reuters quoted a US State Department spokesman as saying on March 31.

In 2019, Iraq’s state-owned Mass Energy Group Holding (MGH) and American energy company GE Power agreed to work on Phase 3 of Besmaya Power Plant in Baghdad. Under the agreement, GE Power should have provided Iraq with four 9F gas turbines and four generators to equip the plant. The partnership is poised to bring the capacity of what is already the country’s largest power plant up to 4.5GW, enough to supply four and a half million homes.