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NIGC, CBI Accelerating Gas Exports to Iraq

NIGC, CBI Accelerating Gas Exports to IraqNIGC, CBI Accelerating Gas Exports to Iraq

A delegation of representatives from the National Iranian Gas Company and Central Bank of Iran have traveled to Iraq to fast-track gas exports to the Arab neighbor, the executive director of NIGC said in a statement.

Hamidreza Araqi added that the visit is aimed at hammering out the financial details of gas export to Iraq, including the method of payment by the Iraqi government for Iran's natural gas, Shana reported on Saturday.

"The investor of the project will be repaid in a certain period," the official said without elaboration.

The visit comes after an Iraqi mission finalized terms of the agreement in Tehran last week, including the execution of the project, extending the contract and raising the volume of exports that was initially agreed upon.

"It has been agreed to supply 25 million cubic meters of gas to Iraq. The two sides have signed an addendum to raise the volume to 35 mcm during the hot season and have also extended the contract from four to six years," he said. The official noted that as part of the deal, Iran will hold a training course for Iraqis on meter reading, issuing bills for customers and other operational aspects concerning gas supply and consumption.

Export is finally expected to take off in June after months of delay due to what was blamed on security issues for the gas pipeline.

War-ravaged Iraq is still struggling to recover from the 2003 US invasion that laid waste to the country's infrastructures and caused a vacuum of power that has since worsened its security.

Iraq is grappling with a shortage of electricity that has caused lengthy outages and mass protests against the government. The country needs Iran's gas to feed three of its power plants—Rumaila, Shatt al-Basra and al-Najibiyah—to partially offset the blackouts.

Tehran and Baghdad signed a draft deal in 2013 to transfer Iran’s gas to two Iraqi power plants. However, the two countries agreed to postpone exports to the second quarter of 2015, in view of the political insecurity in the region.

A 270-kilometer pipeline stretches from Charmaleh, a village located in the western province of Kermanshah in Iran, to Naft Shahr, a town bordering Iraq and then to power plants in Baghdad. A second route, with a capacity of 30 mcm/d, will pass through Basra.

Financialtribune.com