Iraq signs five-year natural gas deal with Iran

News Desk - The Cradle

The deal comes after Iraq’s prime minister promised to achieve energy self-sufficiency within two months

Iraqi Electricity Minister Ziad Ali Fazel signed a five-year natural gas import contract with an Iranian company on 27 March, according to the Ministry of Electricity.

The agreement signed by the two parties states that 50 million cubic meters of gas will be imported daily. The ministry said the agreement aims to keep the plants operating at increased demand levels that peak during the summer season.

Natural gas imports will continue until the rehabilitation and development of domestic gas fields meet the levels required to meet Iraq's needs.

"The Ministry of Electricity is nearing completion of preparations for the summer season, from renovating power plants to having new power plants, such as Dubz, Okaaz, and Musayb station, as well as rehabilitation of electricity networks and transmission lines,” Ali Fazel told Rudaw.

According to a spokesman for the Ministry of Electricity, the plan will be completed by 1 May. Current electricity production is at 19,000 to 20,000 megawatts per day. With the completion of the plan, it will reach 27,000 megawatts.

The spokesman added that they plan to add an extra 5,000 megawatts of electricity to Iraq’s national grid by the end of this year.

This deal comes after Iraqi Prime Minister Mohammed Shia al-Sudani said that Iraq would become fully self-sufficient in oil within two months and cease needing imports.

"Within two months, we will officially announce oil self-sufficiency and halt imports, saving $3.2 billion," Sudani said during Al-Rafidain Dialogue Forum 2024 in Baghdad.

Sudani also stated in 2023 that Iraq would end reliance on Iranian oil imports within a three-year period.

At the inauguration of a southeastern Mayan governorate power plant last year, Sudani said, “This project will supply the system with a new capacity of 250 megawatts.” He also noted that the government’s strategic plans “will contribute to reducing operational budget spending, especially with regard to gas imports.”

“The government is working on more than one level to improve the country’s electricity network,” Sudani said, adding, “All problems resulting from lower Iranian gas supplies have been tackled with the settlement of all payments and the signing of an agreement to provide Iran with crude in exchange for gas which operates our power stations.”