Iraq seeks to maintain gas and electricity imports from Iran amid sanction challenges

Iraq seeks to maintain gas and electricity imports from Iran amid sanction challenges

TEHRAN - Iran's exemption for exporting gas and electricity to Iraq was lifted on March 8, 2024, prompting the Chairman of the Economic Committee of the Iraqi Parliament to meet with the U.S. Charge d'Affaires in Baghdad.

Iraq's exemption for importing gas and electricity from Iran was lifted on March 8, 2024. This prompted the Chairman of the Economic Committee of the Iraqi Parliament to meet with the U.S. Charge d'Affaires in Baghdad the previous night.

He emphasized that preventing the import of Iranian gas by the U.S. would have catastrophic consequences for the people of Iraq, especially in the summer, as it would lead to the collapse of the country's state electricity system.

The Iraqi Parliament Economic Committee's press office reported that Atwan Al-Atwani, the Chairman of the Committee, met with Daniel Rubenstein, the U.S. Charge d'Affaires, and his accompanying delegation. Al-Atwani pointed out the importance of this meeting in the current sensitive situation and emphasized the need for continuous communication to rectify the relations between the two countries.

The U.S. Charge d'Affaires responded during the meeting, stating that he understood the issues raised by Al-Atwani concerning energy and banking sanctions and promised to relay these messages to the U.S. government in hopes of finding permanent solutions that would serve the interests of both nations. He also noted that sanctions have not yet included the import of natural gas.

On the other hand, the U.S. Ambassador, while expressing sympathy for the issues Al-Atwani raised, especially regarding energy and banking sanctions, promised to convey these messages to his government. He expressed hope that permanent solutions and measures could be found to address these issues in a way that benefits both nations.

Daniel Rubenstein also emphasized that natural gas imports have so far been outside the "sanctions framework."

Under the March 2024 agreement, Iran committed to exporting 50 million cubic meters of gas per day to Iraq, a contract valued at about six billion dollars annually. In addition, in July 2022, Iraq signed a five-year contract to purchase 400 megawatts of electricity from Iran.

In recent years, Iraq has been working to reduce its dependence on Iranian gas. Several projects have been initiated to secure energy from other sources. In October 2024, Iraq signed an agreement to import 20 million cubic meters of gas per day from Turkmenistan, which could serve as an alternative to Iranian gas.

Another possibility is purchasing LNG from Qatar. Iraq is building an LNG storage terminal in the Faw port, where Qatar is likely to be the main supplier. Additionally, the Qatar-Turkey gas pipeline, which was halted in 2009 but has since regained attention following the fall of Bashar al-Assad's regime, could also provide an alternative.

Initially, the Qatar gas pipeline was planned to pass through Saudi Arabia and Syria, reaching Turkey and then to Europe. The pipeline also passes near Iraq’s border, and it is said that it could supply gas to the country’s power plants and industries.

Furthermore, connecting Iraq to the Gulf Cooperation Council’s electricity grid could reduce Iraq’s dependence on Iran. This project includes an electricity transmission line from Kuwait to Basra, which could supply Iraq’s electricity needs.

Additionally, a $27 billion contract has been signed with Total Energy to develop gas fields. In July 2023, Iraq and Total Energy, a French company, signed a $27 billion contract to increase oil production and enhance the country’s energy production capacity with four oil, gas, and renewable energy projects.

It is important to note that these solutions require time and significant investment. In the short term, Iraq remains dependent on Iranian gas, and finding an immediate alternative is difficult.

In this context, three Iraqi energy officials told Reuters on Sunday that Iraq has no immediate alternative to replace the energy it imports from Iran, which will lead to significant issues in providing enough electricity for domestic consumption, especially in the summer.

One senior official from Iraq’s Ministry of Electricity told Reuters, “The government has started taking urgent measures to reduce the impact of the U.S. decision on Iraq’s electricity supply.”

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source: tehrantimes.com