Baghdad seeks to replace Iranian gas after US action on Iraq-Iran energy trade
Baghdad, which has been unable to import electricity from Iran due to U.S. sanctions, is now looking at Qatar and Oman, should Washington also impose the same restrictions on their gas trade, according to the head of Iraq's South Gas Company.
A spokesperson for the State Department said that President Donald Trump’s administration revoked on Saturday an exemption from sanctions which allowed Iraq since 2018 to pay Iran electricity. The move was part of its campaign of "maximum pressuring" against Tehran.
Gas is the most important cross-border commodity.
Baghdad receives from Iran up to 50 million cubic meters of gas a day, depending on the needs. This is part of a five-year extension agreement signed in March 2024.
According to Iraqi energy officials, Iraq imports gas from Iran at a cost of $4-5 billion annually.
Iraq's electricity ministry said that the loss of Iranian gas would result in a reduction of Iraq's 27,000 megawatts of daily electricity production by one-third.
Hamza Abdul Baqi of state-owned SGC said that Iraq would lease a floating LNG terminal to mitigate the potential impact of losing Iranian gas imports.
This measure was taken because of the (potentially) abrupt cutoff of Iranian Gas. Abdul Baqi, the Minister of Oil has been tasked by the government to find alternatives.
He said that a deal will be signed for the LNG terminal with UAE-based Breeze Investment at the end March. He added that he expects it to be operational in mid-year, handling gas from Qatar and Oman.
He said that the terminal will be located at the port of Khor al-Zubair, on the Gulf. The gas will then be piped through a 45-kilometre-long (28-mile-long) pipeline which is already being constructed to a point of supply near Basra in the south of Iraq where much of the country's oil is drilled.
He added that it will be able supply at least 500 millions cubic feet (14million cubic metres) per day of gas, which is about a third the current Iranian supply.
(source: Reuters)
