Iran is all set to commence natural gas delivery to Iraq at the border in three weeks, a senior Iranian oil official said.
Amirhossein Zamaninia, the deputy oil minister for international affairs, made the statement after holding talks with Iraqi Deputy Oil Minister Fayadh Hassan Nima in Tehran, Shana reported on Wednesday.
Describing the meeting as constructive, Zamaninia said, "This was the first meeting held with Iraqi oil and gas officials after Tehran struck a nuclear deal with the world powers over its nuclear program. A majority of hurdles to undertake long-awaited joint ventures have been cleared and Iraq does not have serious problems in materializing the agreements it reached with Iran."
According to the official, the two sides exchanged views regarding natural gas delivery to Iraq, which has been delayed for six years due to security and technical reasons, as a 20-kilometer pipeline to deliver Iran’s gas to Iraq’s Diyala Province is yet to be laid.
Tehran and Baghdad signed a draft deal in 2013 to transfer Iran’s gas to two Iraqi power plants. Plans include exporting 30-50 million cubic meters of gas per day to Iraq, the revenues from which are estimated at $4-6 billion.
Gas will be exported from Naftshahr region in Kermanshah Province in the first phase, through a branch diverging from the Sixth Iran National Gas Trunkline.
In March 2015, Alireza Kameli, managing director of the National Iranian Gas Export Company, said exports to Iraq could begin in May, if security conditions improved.
"Iran first announced a delay in September last year, shortly after Islamic State militants took control of large swathes of Iraqi territory," he said.
Although exports were expected to commence by the end of May 2015, Hamdireza Araqi, managing director of the National Iranian Gas Company, blamed technical and financial issues, which seem to have been settled.
Iran sits on the world's largest gas reserves, according to statistics compiled by BP. It holds 17% of the world's proven natural gas reserves.
Asked about more details, Zamaninia said, "Serious talks were held about cooperation in developing three joint oilfields, namely Sohrab (Hoveizeh), Khorramshahr (Sandbad or Sabeh) and Parviz (Naft Khaneh, southern Iraq). Nonetheless, negotiations will continue in this regard as there are still ambiguities to be resolved."
Oil Talks
"Negotiations are underway on launching a two-way oil and oil products' pipeline from Abadan, southern Iran, to the Iraqi city of Basra," Zamaninia said, noting that Iran has prepared a comprehensive educational package to be presented to Iraqis.
Calling for upgrading and renovating Iraqi refineries by Iranian private companies, he noted that Iran-Iraq cooperation in international oil markets was also discussed.
Iran and Iraq first signed a memorandum of understanding to build the Basra-Abadan pipeline in February 2004 and three subsequent agreements were signed by the two governments between 2005 and 2007.
The agreements proposed a twin pipeline system for taking delivery of around 150,000 barrels per day of Iraqi crude to Iran’s largest refinery at Abadan and delivering Iranian refined products back to Basra.
For Iraq, the pipeline will help meet demand with domestic crude production.
For Iran, the pipeline will allow its oil industry to benefit by processing Iraq’s cheaper crude and earning higher profits from oil sales.
