ERBIL, Kurdistan Region – Tehran and Erbil agreed to boost trade and energy ties, agreeing to build a gas pipeline to fuel power stations in Kurdistan with Iranian gas, and another to transport Kurdish fuel to Iran, officials said.
The plans were discussed Monday between a delegation headed by Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani and a visiting Iranian team headed by Rostam Qasemi, a former oil minister who now heads the Iran-Iraq economic development committee.
“Energy ties between the Kurdistan Region and Iran were discussed in the meeting and we agreed on two points that both are related to energy,” said Abdulla Akreyi, head of the KRG-Iran relations. “We agreed on building two pipelines from Iran to Kurdistan. The second one is for the KRG to export oil to Iran; in return Iran would supply 3-4 million liters of fuel for the power stations (in the Kurdistan Region),” he added.
Qasemi also met with the KRG Minister of Natural Resources Ashti Hawrami.
According to a statement posted on the KRG’s website, Iran and the Kurdistan Region are to form several joint committees to work on bilateral economic and trade relations.
“Both sides are to work on ways to increase trade and expand cooperation in the energy field,” said the statement.
“We have delegated the work to a joint committee to finalize the agreement,” Qasemi said.“
Iran is the second-largest trade partner of the Kurdistan Region, after Turkey. Tehran-Erbil trade exceeded $4 billion in 2013.
“Compared to Turkey we have less trade with the Kurdistan Region, and we are hoping to double the size of economic ties after this visit,” Qasemi told Rudaw.
The Iranian official estimated that Kurdistan would need a massive volume of gas to power its industry, generate electricity and for household usage.
“The Kurdistan Region is in need of 25 million cubic feet (Mcf) and Iran can supply that volume,” said Qasemi. “Natural gas is used for industry, electricity-generation, and household use, and Kurdistan can benefit from it as it gets cold here during the winter and it’s cheap,” he added.
According to the initial agreements, Iran will construct a 180-kilometer pipeline inside its territory, reaching its border with the Kurdistan Region.
Rudaw learned, from a source speaking on condition of anonymity, that the Iranian delegation has pledged to finish the project within six months, pending agreement by the KRG.
The source added that the Iranian delegation had also offered the KRG access to Iran’s ports on the Persian Gulf to sell Kurdish oil. The plan would require the KRG to get its oil overland to the Gulf. The KRG is said to be studying the proposal.
Qasemi also rejected claims that Kurdish oil is being smuggled into Iran. “We absolutely deny that Kurdistan oil is smuggled into Iran,” he said. Iraqi officials have in the past accused Erbil of illegal oil sales to Iran.
Qasemi said that Tehran wants Erbil and Baghdad to resolve their energy disputes through dialogue, and encouraged both sides to agree on cooperation.
Baghdad opposes plans by the KRG to export Kurdish oil independently through a pipeline to Turkey. Baghdad says only it has the authority to control oil and gas sales from any part of Iraq, a claim the Kurds reject. Both sides invoke the constitution to back their claims.
“We are using all our efforts to resolve the issues between the Kurdistan Region and Iraq,” Qasemi said. “We are happy to see cooperation between all parts of Iraq, and we inform our friends to have active and constant relations with the Kurdistan Region.”
Iran holds great sway over Baghdad and the government of Prime Minister Nuri al-Maliki, who is a staunch ally of Iran and a fellow Shiite.
A Kurdish official, speaking on condition of anonymity, explained that, “If we finalize the agreement with Iran to export oil, then Iraq will be compelled to acknowledge the authority of KRG to sell its own oil.”
Akreyi, the KRG official, believes that Iran has come to terms with the KRG’s right to export its own oil and gas, hence the visit by the Iranian delegation.
“Certainly, there will be agreements between KRG, Baghdad and Iran,” he said. “The situation is favorable, that’s why Iran is coming. If they knew the constitution would not allow it (independent oil- and gas sales), they would not have come.”
