The Iraqi Ministry of Electricity says it is in talks with Iran to increase natural gas imports from its eastern neighbor.
According to Ahmed al-Ebadi, a ministry spokesman, the volume of gas imports from Iran is currently at 43 million cubic meters a day, while Iraq requires about 60 mcm of gas, Tasnim News Agency reported.
Iraq's electricity production has increased by 22% compared to the previous year, he added.
However, as new power plants are set to be launched in Iraq in the coming months and they rely on natural gas as feedstock, the Arab country needs to increase its gas purchases from Iran.
The National Iranian Gas Company produces close to 850 million cubic meters of gas per day, of which 90% are used domestically and the rest is exported.
Iran supplies gas through two pipelines to power plants in Basra, Samawa, Nasiriyah and Diyala.
Iranian Energy Minister Ali Akbar Mehrabian said last week that Iran had signed a long-term strategic electricity contract with Iraq to provide its Arab neighbor with sustainable energy supplies.
“As we are facing a surplus of electricity production in the country at many times of the year, we pursue the development of energy diplomacy centered on electricity with neighbors to both solve their problems and create a stable flow of income and use the maximum capacity of our electricity network,” Mehrabian said.
Referring to Iran's self-sufficiency in power plant construction knowhow, the minister said close to 2,000 megawatts of power plants have been built in Iraq by Iranian companies with Iraqi investment.
He added that knowledge-based companies from Iran's private sector are building 1,700 megawatts of power plants in the neighboring country.
Iraq relies on Iran for natural gas that generates as much as 45% of its 14,000 MW of electricity consumed daily. Iran transmits another 1,000 megawatts directly, making itself an indispensable energy source for its Arab neighbor.
Paying Debts
Up until recently, Iran owed a huge amount of money to Iran for its unpaid gas bills. However, it was in mid-June that Iraq paid a sum of $1.6 billion.
According to Oil Minister Javad Owji, Iraq has settled all payments related to purchases from the National Iranian Gas Company since the summer of last year.
The minister said the payment would allow Iran to increase its supply of natural gas to Iraq over the summer months when the Arab country faces high demand for energy by its power plants.
NIGC slashed its supply of natural gas to Iraq in late 2021 after it announced the Arab country had been in arrears of more than $5 billion for its previous imports.
Despite its large oil and gas reserves, Iraq remains heavily dependent on Iran for its energy needs.
The non-payment of dues has forced Tehran to slash its gas and electricity supplies to Iraq several times in the past few years, leading to frequent outages in the Arab country.
Discussions were underway at multiple levels since last year to reach an understanding on freeing the funds with a sanctions waiver from Washington.
US sanctions have for years prevented Iran from accessing its assets in several countries, including Iraq.
