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    Iraq Expects More Iranian Gas, despite US

Summary

With the US waiver extension set to expire in June, the question of Iranian gas and power imports looms large.

by: Dalga Khatinoglu

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Iraq Expects More Iranian Gas, despite US

The US government has ended waivers for importing Iranian oil, it said April 22. Iraq – which has received gas import waivers until late-June – says it needs Iranian gas and electricity.

Washington’s six-month waivers to eight Iranian oil importers – China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece – will expire May 2.

US gave a 90-day waiver for Iraq late 2018, but then extended it to June. It is not clear whether Iraq could have a further extension but the US Charge d’Affaires in Baghdad, Joey Hood, told the local al-Dijlah channel April 22 that if Iraq cannot comply with sanctions, then the US may take diplomatic measures against it. He said that Washington wants to see an Iraq that is independent from Iran’s energy.

Iran started flowing 7mn m³/day of gas to Baghdad in June 2017. Exports to Basrah started in mid-2018. The contractual volume is 50mn m3/d, projected to grow gradually. Iran has to send 70% of the contracted volume during the hot seasons and the rest in other months.

Gas import disruption last November caused massive power outages in Baghdad and other cities.

Iraq energy ministry spokesman Musab al-Mudaris told reporters April 22 that the country has no choice but to continue Iranian gas imports: “Several gas-fired power plants with 2.4GW are operating on Iranian gas, while Iran exports directly a further 1.5 GW electricity to Iraq,” local media quoted him saying.

He also said that Iraq plans to increase Iranian gas intake from current 28mn m3/d to 35mn m3/d in June, which is likely due to the contract that means more deliveries in summer. Iraq’s power generation capacity is growing 7%/yr and it has a 5 GW deficit. The country has been seeking alternative sources as well.   

Iraqi electricity minister signed two memoranda of understanding with Saudi oil minister April 20 on long-term electricity co-operation and linking the countries’ power grids. The two countries share a border.

Saudi Arabia has offered to construct 3-GW of renewable power plants in the north of Iraq and to export electricity at $21/MWh – a quarter of the price in Iran’s current contract with Iraq.

Siemens and General Electric have signed preliminary agreements to add 11 GW and 14 GW respectively to Iraq’s power infrastructure as well.