Iran will be heavily involved in the agreement by acting as swap agent
Оригинальный текст опубликован на сайте «Upstream», 11 October 2023 9:28 GMT . Автор: Материал доступен по .
Iraq has moved closer to finalising a long-sought-after agreement to import natural gas from Turkmenistan via a swap arrangement with Iran, which separates the two countries.
Turkmenistan’s Foreign Ministry said state-run gas producer Turkmengaz signed a memorandum of cooperation with the Iraqi Ministry for Electricity in the Iraqi capital, Baghdad, this past weekend.
The agreement envisages the cross-border delivery of about 10 billion cubic metres of natural gas per year from Iran to Iraq, with a similar volume to be supplied by Turkmenistan to north and northeastern Iran.
The ministry said the document paves the way for both sides to continue negotiations on the terms of the planned agreement, with the next round of talks scheduled for the end of October in the Turkmen capital of Ashgabat. Both sides reportedly aim to conclude a binding agreement before the end of the year.
Iraq’s own natural gas production, reported at almost 9.8 Bcm last year, has not been enough in recent years to power all the country’s electricity plants.
In 2022, Iraq reportedly had to import an estimated 9 Bcm og gas from Iran, as well as some electricity, to keep its power stations running.
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It also faced issues for the payment of these supplies because of international sanctions against Iran.
In June this year, Iraq was reported as agreeing a temporary waiver with US authorities to allow it to send outstanding arrears of $2.76 billion to Iran for previous gas and electricity deliveries, according to Reuters.
The US was reported as urging the government of Iraq, Opec’s second-largest producer, to reduce its reliance on Iranian gas imports.
Iraq flares much of the associated gas that extracted alongside crude oil at its fields, as the industry lacks the processing facilities to capture and treat the gas and use it for energy generation.
A statement issued by the Iraqi Ministry for Electricity said that Iraq and Turkmenistan had concluded a memorandum of understanding to supply Turkmen gas to the country “as part of the government’s plans to diversify energy sources and ensure a stable and sustainable supply of electricity”.
Besides Turkmenistan, Iraqi authorities have appointed a delegation of officials to approach Qatar to discuss potential gas supplies.
Iraq’s energy consumption usually peaks during the summer period, when outside temperatures often reach 50 degree Celsius.
Diversification drive
Turkmenistan has long sought to diversify its natural gas export routes after the breakdown in gas trade arrangements with Russia in 2009.
In 2010, Turkmenistan commissioned a 182-kilometre gas pipeline from the Dovletabad gas field to the Khangiran gas field in northeastern Iran, with an initial capacity of 6 Bcm per year that was later doubled with the installation of additional pumping stations.
The country also operates a legacy gas pipeline running along the Caspian shore from the Korpedzhe and Gamyshlydzha fields in Turkmenistan to Kordkuy in Iran. Commissioned in 1997, it has an annual capacity of 8 Bcm.
Between 2009 and 2012, Turkmenistan and Kazakhstan completed the construction of three parallel gas export pipelines to China. Talks on building a fourth line, which would run across Tajikistan to China, resumed last year.
In 2021, Turkmenistan also had contracts in place to deliver between 1.5 Bcm and 2 Bcm of gas to Azerbaijan via a similar swap arrangements with Iran.