Iraq hopes to restore full Iranian gas import volumes

Iraq's electricity ministry hopes to resume full imports of Iranian gas after reaching an agreement with Tehran over how to pay its outstanding debts. The news comes just as the temperatures in Iraq have begun to soar.

Iraq's ministers of electricity and finance and the director general of the Trade Bank of Iraq have agreed to schedule the debts so as to resume Iranian gas exports over the coming days, electricity ministry spokesman Ahmed Moussa said.

Gas supplies from Iran were temporarily cut in December over Baghdad's debts of more than $6bn, and although supplies resumed several weeks after, volumes have been severely restricted since.

Moussa said imports were currently 20mn m³/d, less than a third of the contracted 70mn m³/d Iraq needs to meet its peak summer demand as temperatures rise to more than 50°C.

If full gas imports were to resume resume, Iraq's electricity generation would reach 22,000 MW, Moussa said. But this is still likely to be well short of peak demand.

Iraq has been importing Iranian gas under two supply agreement signed in 2013 and 2015. Under the first, Iran is committed to export a maximum of 35mn m³/d of pipeline gas to the 3GW Bismaya power plant, Iraq's largest gas-fired plant, which powers the capital. The second calls on Iran to supply southern Iraq with 20-35mn m³/d, with the volumes adjusted depending on the regions' needs.

The country's reliance on gas and electricity imports from Iran also presents political risk as it depends on US sanctions waivers. The US government gave Baghdad a 120-day waiver in March allowing it to continue importing gas and 1,200MW of electricity from Iran.

The government is under pressure to tackle a growing power supply deficit as basic services suffer from under-investment in critical infrastructure and poor governance. The electricity ministry plans to add 8.3GW of generation capacity in 2021-23.

By Adal Mirza