Domestic Consortia May Join Iraq Gas Export Project

Domestic Consortia May Join Iraq Gas Export ProjectDomestic Consortia May Join Iraq Gas Export Project

The required infrastructure for expansion of gas export to Iraq will be built by the end of April, an official from the oil ministry announced.

"We have 14 domestic consortia interested in investing in this project", Hamidreza Araqi, deputy oil minister told IRNA.

The mostly private companies have already been provided with the required information and are expected to submit their bids and other documents by the set deadline. Upon the confirmation of their eligibility, contracts will be signed under tender regulations, Araqi added.

The project is expected to increase gas exports to Iraq to 70 million cubic meters per day, he noted.

The public tender, valued at $1.5 billion, concerns fulfillment of the project in the form of build, operate, transfer (BOT) agreement. "Capital costs are to be fully reimbursed through the revenues generated by the exported gas to Iraq," the official said.

Construction of the pipeline, which will pass through Shalamcheh and Basra, will expand the capacity of gas export to the western neighbor. To transfer gas to Iraq two routes have been mapped out, which will include Basra and Baghdad. The pipeline for the latter is near completion, and gas export thereby is expected to commence in May.

Tehran and Baghdad signed a draft deal in 2013 to transfer Iran’s gas to two Iraqi power plants. The agreement is aimed at supplying Al-Baghdad and Al-Mansouriyah power plants in Iraq with 25 million cubic meters (mcm) per day of natural gas.

According to preliminary agreements, four million cubic meters (mcm) of gas will be transferred to power plants in Baghdad, with the figure ultimately expected to reach 25 mcm. Only seven kilometers of the pipeline remains uncompleted on the Iraqi side, which will be shortly laid, Azizollah Ramezani, director of international affairs at the National Iranian Gas Company said.  

The second route will pass through Basra, with an ultimate capacity of 35 mcm. Total gas export capacity to Iraq could possibly increase to 70 mcm.

According to Araqi, the project, if sufficiently funded, involves construction of pipelines and other relevant gas export appliances, including gas transfer stations at Dezful-Kuhdasht, Kuhdasht-Bisotun, Kuhdasht-Chahar Meleh, Bisotun-Kermanshah, Ahvaz-Khorramshahr, Khorramshahr-Shalamcheh, as well as construction of compressor stations, gas pressure control and metering stations.

"Our estimates show that pipe-laying operations and construction of gas pressure control and metering stations are projected to be carried out in one year," Araqi stated, adding that building compressor stations is expected to take two years.