Iraq Loses Iranian Gas Imports
Iran stopped gas exports to Iraq November 27 following an explosion caused by major tremors near the border area. Iraq’s electricity ministry confirmed the following day that imports were suspended, cutting off 2.5 GW generating capacity near the capital, Bagdad, and causing power cuts elsewhere too. Iran said it expected to restart exports in a few days. Iraq has a US waiver allowing it to import Iranian energy.
Iraq’s electricity ministry said recently that Iran is exporting 28mn m3/d gas to Baghdad but consultants at Wood Mackenzie estimate that Iran has sold 17mn m3/d on average since March 21, the start of the Iranian year.
Iran started selling 7mn m3/d to Baghdad June 22, 2017, and this gradually rose to 12mn-14mn m3/d by the end of the year but Iran has not confirmed the total. Iran has two agreements covering exports to Baghdad and Basra, each for 25mn m3/d, with about a third flowing in winter and two thirds in summer.
An Iranian industrial source recently told NGW that Washington’s 45-day waiver for Iraq came just as the Iran-to-Basra pipeline was completed, and the two sides had been working hard together to resolve the letter of credit issue to start gas flow to southern Iraq.
For gas exports to Baghdad the Trade Bank of Iraq had opened a letter of credit in early June 2017 and ensured payments would be made in the Iraqi dinar. Iran then immediately started gas flows.