Hamid Hosseini, a board member of Iranian Oil, Gas and Petrochemical Products Exporters’ Association, has denied a report by Reuters claiming that Tehran has accepted to buy Iraqi food products in exchange for natural gas and energy supplies, ISNA reported.
"In exchange for the gas Iraq is to pay with food and humanitarian items to Iran ... Iran accepted this proposal," Reuters quoted two Iraqi sources, a senior government official and a member of Iraq’s ministerial energy committee, as saying on Wednesday.
"The war-stricken Arab neighbor meets a part of its own food demand by importing from Iran. Buying such products from Iraq is apparently out of the question," he said, adding that Iraq has no proper food industry nor does it have the infrastructure to export food to Iran.
Washington granted Iraq a waiver so that it can import Iranian gas and energy supplies, but the United States has said the exemption will last only 45 days. Iraqi officials including oil ministry spokesman, Asem Jihad, say not only is the time limit not enough to find an alternative source, but also that there are no replacements for it.
"Electricity projects are being undertaken in the country by foreign firms, none of which will become operational before 2022," he said.
Hosseini noted that Baghdad is striving to find alternative sources to replace its imports from Iran.
"Iranian gas and power accounts for almost 20% of the neighbor's energy demand," he said, noting that about 12 million cubic meters of gas per day is supplied to Baghdad. Basra, Iraq's second largest city, also needs Iranian gas to feed its power plant as part of efforts to reduce chronic outages.
Referring to the frequent power cuts in the neighboring Arab country, the official said outages in Iraq is 12 hours per day at the minimum and halting natural gas import from Iran would make a bad situation worse.
Main Electricity Importer
Talks are underway and Iraqi officials have proposed to repay their huge debt in dinar, Hosseini said.
Baghdad’s debt for electricity imports is near $1 billion. Iraq is the biggest importer of Iranian electricity over the past decade and has a power deficit to the tune of 7,000 MW.
Reportedly, theft of electricity from the power grid prevails in Iraq.
"As per the power and gas contracts, Baghdad should pay the debt in euros. It is now insisting on paying in its national currency because their revenues are in dollars and there is no way to convert the greenback into euros, Moreover, they are concerned about being penalized by Washington," the Iranian official said.
Asked about Kirkuk oil export to Iran, he concurred that Iraq has stopped exporting crude from its northern Kirkuk oilfield to Iran to comply with the US sanctions.
Swapping of Kirkuk crude was suspended after the transfer of barely 700,000 tons of oil to Iran.
"Swap operations will not resume because the Baghdad government has started oil export to Turkey from Kirkuk via the old route (Kirkuk-Ceyhan)."
The Kirkuk–Ceyhan Oil Pipeline, also known as the Iraq–Turkey Crude Oil Pipeline, is a 970-km long pipeline that runs from Kirkuk in Iraq to Ceyhan in Turkey. It is Iraq's largest crude oil export line.
