Iraq eyes Syria transit route for Egyptian gas imports

Iraq is turning to Syria as a possible route for gas imports, potentially exposing itself to a new diplomatic split with the US over sanctions.

Iraqi oil minister Ihsan Abdul Jabbar Ismail said today that discussions have opened with his Syrian counterpart Bassam Toumeh.

"We have a common vision about the possibility of steering and moving Egyptian gas through Syria land," a spokesman for the Iraqi oil ministry said. Neither minister provided any further details.

Gas exports from Egypt to Iraq would probably have to flow through an extension to the Arab Gas Pipeline, which runs from Egypt to Jordan, Syrian and Lebanon. The Syrian section was completed in 2008. Transit through war-torn Syria could be difficult and, with Damascus under US oil sectoral sanctions, may complicate Iraq's already relationship with Washington.

Iraq imports electricity gas from Iran, putting it in a difficult position with the US government. US sanctions on Iran do not explicitly prohibit Iraq from importing gas and electricity from its neighbor, but Baghdad is reliant on US waivers that insulate the Iraqi banking system from collateral exposure to sanctions. Washington requires Baghdad to prevent Tehran from being able to be paid in US dollars for its exports.

The US issued its latest sanctions waiver at the end of March, enabling Iraq to continue its imports from Iran until 4 August.

Just discussing this Syrian project highlights the trouble that gas-rich Iraq has faced developing its infrastructure over the past decade. In 2016, Baghdad held talks with the governments of Egypt and Jordan over a proposed gas pipeline from Rumaila, in southern Iraq, to Ma'an in the south of Jordan, linking with the AGP and enabling Iraqi gas exports to Egypt.

And Iraq had planned to supply surplus gas to Syria from the 5.6 trillion ft³ (157bn m³) Akkas field in the western Al-Anbar province, but the field's development was halted by a takeover by Islamic State militants of areas on both sides of the border. With governments now in control of the territory in eastern Syria and western Iraq, work could resume. US-based oil services firm Schlumberger is frontrunner to lead a consortium to develop Akkas, a project that is also open to Saudi companies.

By Adal Mirza