Gas Export to Iraq Next Month

Gas Export to  Iraq Next MonthGas Export to  Iraq Next Month

Gas exports to Iraq, which was initially due in May, is delayed for at least a month because of technical and financial impediments, managing director of the National Iranian Gas Company (NIGC) said.

"Although exports were expected to commence by the end of May, the two sides are still grappling with technical problems," Hamdireza Araghi was quoted by IRNA as saying.

Final testing of the pipeline is half-complete, the official said, noting that supplying the water, which needs to be injected into the pipeline as part of the final testing, faced difficulty due to regional climate conditions. However, the testing is expected to be carried out in a month.

There are also contractual uncertainties over a payment method given the financial sanctions imposed on Iran that prevents transactions with the NIGC. "We are still negotiating to solve the matter," Araghi said.

Tehran and Baghdad signed a draft deal in 2013 to transfer Iran’s gas to two Iraqi power plants. There are plans to export 30-50 million cubic meters of gas per day to Iraq, the revenues from which is estimated at $4-6 billion. Gas will be exported from Naftshahr region in Kermanshah Province in the first stage, by diverging branches of the Sixth Iran National Gas Trunkline (IGAT 6).

Iran is under punitive economic sanctions because of its nuclear program, which the West fears could be aimed at developing weapons. US efforts to shut Iran out of the international banking system have gained strength as other countries also joined the effort over the past years.

After marathon talks in Lausanne, Switzerland, Iran and the P5+1 (Britain, China, France, Russia, the US plus Germany) reached a framework agreement on April 2 that calls for lifting all trade sanctions against Iran. The details of the agreement are to be finalized by a June 30 deadline.