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Iraq
President Barham Salih met with Iran's Minister of Energy Reza Ardakanian and Ambassador Iraj Masjidi on June in Baghdad. Photo: Iraq Presidency
ERBIL, Kurdistan Region – Iraq has signed a two-year contract with Iran renewing commitments to import Iranian gas for electricity, the Islamic Republic News Agency reported Thursday.
Iran’s Energy Minister Reza Ardakanian led a government delegation to the Iraqi capital of Baghdad on Wednesday to discuss the future of Iran’s gas imports into Iraq.
Ardakanian met with Iraqi President Barham Salih, and Prime Minister Mustafa al-Kadhimi in Baghdad on Wednesday, resulting in agreement with the Iraqi officials to continue importing Iranian gas into Iraq through 2021.
In an interview with Iranian state-media, Arkadanian said that the two-year contract with Iraq to continue exporting Iranian gas into Iraq, adding that this is the first time the two countries signed a two-year contract, as previous contracts were only a year long.
Iraq's electricity ministry has yet to confirm the two-year agreement, as “such an agreement needs the Iraqi prime minister's confirmation, and further discussion between electicty ministry and Kadhimi,” Iraqi Electricity Ministry Spokesperson Ahmed Musa told Rudaw English in a telephone interview.
With the signing of the contract, Iraq made $400 million in payments on past debts for its gas imports from Iran, IRNA reported.
The agreement comes as Iraq is nearing US-Iraq strategic dialogue that was announced by US Secretary of State Mike Pompeo at a Washington press briefing, and planned to take place later this month.
"All strategic issues between our two countries will be on the agenda, including the future presence of the United States forces in that country and how best to support an independent and sovereign Iraq,” Pompeo said on April 8.
Since the 1990s Iraq has suffered from severe power shortages, worsened by decades of war, sanctions and terror attacks. In some places, Iraqis are left with just five hours of electricity per day. Chronic electricity shortages have been one of the catalysts behind successive waves of popular protest in the country.
To make up for production shortages, Iraq has been importing electricity and gas to power its electricity stations from neighboring Iran – much to the ire of Washington.
In a gesture of goodwill to Iraq's new government, the US granted Baghdad its ninth waiver to import electricity and gas from Iran last month.
The 120-day waiver protects Iraq from financial penalties for importing otherwise-banned after the US reimposed sanctions on Iran in November 2018, after Washington unilaterally withdrew from the 2015 nuclear deal.
The US has issued energy waivers to Iraq to grant it time to gradually pare down its reliance on Iranian gas and electricity imports, but the newly-signed agreement between Iraq and Iran suggests that Baghdad is looking to continue importing Iranian energy to fill power shortages in the country.
In a meeting on Monday between US Ambassador Matthew Tueller and Iraq’s Electricity Minister Majid Mahdi in Baghdad, both sides agreed to encourage more American firms to invest in the country's energy sector and move it away from Iranian energy import dependency.
“The willingness of the US companies to develop and rehabilitate the electricity system in Iraq, especially after the contribution and the great success that General energy recorded in Iraq,” Tueller said during the meeting, Iraqi state media reported on Monday.
In an attempt to wean itself off of energy imports and bolster its infrastructure, Iraq last year signed contracts with industrial giants Siemens and Honeywell.
However, Iraq still exports 1200-1500 megawatts of electricity daily from Iran, as well as 38 million cubic meters of natural gas per day to feed several of the country's power stations, Iran-Iraq Joint Chamber of Commerce member Sayyid Hamid Hosseini said in an interview with Rudaw in September 2019.
As demand for electricity rises with the arrival of summer heat, Iraq will no doubt have to continue to import substantial volumes of Iranian electricity and gas to satisfy energy demand.
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