Iraq requires Iran’s gas for years to feed its power plants, as Iran’s gas is suitable for Iraq and its price is reasonable, Iraqi Minister of Electricity Adel Karim said.
In order to address power electricity issues in the country, Iraq has been in talks with other countries too but has not struck a deal with any of them yet as creating a power grid connection with Arab littoral states of the Persian Gulf would be very costly, he added.
“The Iraqi government does not accept the prices quoted by Arab countries,” the Iraqi minister was quoted as saying by IRNA.
Most Iraqi power plants depend on Iran’s gas and Iran has been the main supplier of energy to its western neighbor for several years.
Also, Iraq’s Electricity Ministry Spokesman Ahmed Mousa al-Abadi announced that the country’s electricity supply has improved in recent months due to the mild weather and the higher amount of Iranian gas injected to Iraqi power plants.
Promising a different summer in comparison to previous summers, Abadi said the Electricity Ministry would make all-out efforts to prepare for a hike in electricity consumption during the coming summer.
It needs more than 35,000 megawatts of electricity a year to meet domestic needs, but years of war following the 2003 US invasion have devastated its power infrastructure.
The spokesman also said high-ranking delegations, including representatives from three ministries of electricity, treasury and oil, in addition to Salem Chalabi, the CEO of the Commercial Bank of Iraq, are scheduled to visit Iran to hold talks on importing more gas.
According to the spokesman, the two sides have started consultations on increasing Iranian gas export to Iraq, as Iraqi prime minister has ordered the repayment of debt to Tehran within three years.
Recently, Iranian Oil Minister Javad Owji held talks with his Iraqi counterpart Ihsan Abdul-Jabbar on the sidelines of the Gas Exporting Countries Forum in the Qatari capital Doha to discuss expanding cooperation between the two countries in the energy sector, including ways of boosting gas exports to Iraq and repaying Baghdad’s debt to Tehran.
Huge Debt
Iraq is $1.69 billion in arrears on its payments for imports of Iranian gas and in the past few months has been urging Washington to allow cash payments despite sanctions on Tehran.
Iran has exported over 65 billion kilowatt-hours of electricity worth an estimated $6.2 billion to Iraq since 2005. The neighbor is one of the biggest regional markets for Iranian exports. About 25 million cubic meters of gas are also exported daily (worth $200 million a month).
Despite its immense oil and gas reserves, Iraq remains dependent on imports to meet its energy needs and neighboring Iran currently supplies one-third of its gas and electricity under a tightly-controlled waiver from US sanctions.
The restrictions, put in place when Washington reimposed sanctions on Tehran after unilaterally withdrawing from a nuclear deal with Iran in 2018, require Iraq to pay for its energy imports from Iran in kind, not in cash.
The restrictions then require Iran to use the gas money to fund imports of farm and drug products, which must be approved by US officials on a case-by-case basis.
Regarding the payments to Tehran, Iraqi electricity minister said, “The funds to repay the debt remain in the Trade Bank of Iraq. As the US government has allowed us to continue importing the required gas, it should also allow us to release the funds."
Close to 1,200 megawatts of electricity and 25 million cubic meters of gas are supplied to Iraq per day.
