A general view of the Gwer Oil Refinery, which is one of the most important industrial facilities processing oil products, in Erbil, Iraq on August 6, 2023 [Ahsan Mohammed Ahmed Ahmed - Anadolu Agency]
A general view of the Gwer Oil Refinery, which is one of the most important industrial facilities processing oil products, in Erbil, Iraq on August 6, 2023 [Ahsan Mohammed Ahmed Ahmed – Anadolu Agency]
Iraq is in advanced talks with Algeria to secure a liquefied natural gas (LNG) supply deal, with an announcement expected within two months, sources told energy platform Taqa. The agreement, projected to cover one million tons per year under a medium-term contract, comes as Baghdad scrambles to replace Iranian gas supplies following tightened US sanctions.
LNG imports are set to begin once Iraq finalises infrastructure at Khor Al-Zubair port in Basra. The development plan includes installing a floating storage and regasification unit (FSRU) and linking it to the national grid via a 40-kilometre pipeline. Completion is expected within five months, positioning Iraq to stabilise its electricity sector by summer 2025.
Iraq’s urgency in securing new gas supplies intensified after Iranian exports—previously supplying 50 million cubic meters per day—halted in early December due to increased domestic consumption amid a harsh winter.
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The situation worsened following Washington’s 9 March decision to revoke a sanctions waiver allowing Iraq to buy gas from Iran, forcing Baghdad to seek alternatives. However, conflicting reports have emerged. Farhad Alaaeldin, foreign affairs adviser to the Iraqi prime minister, said last week that Washington has not revoked Iraq’s waiver on importing Iranian gas, according to Reuters. Instead, the exemption for importing Iranian-generated electricity has been cancelled. He noted that 43 per cent of Iraq’s power comes from Iranian gas, making diversification a challenge.
Alongside the Algeria deal, Iraq is negotiating with Qatar and working to double electricity imports from Turkiye. It also signed a deal with Turkmenistan last October for up to 20 million cubic meters of gas per day, which is set to meet half of Iraq’s power plant demand.
Last month, Deputy Oil Minister for Gas Affairs Izzat Saber confirmed Iraq’s commitment to ending gas flaring by 2030, aiming for long-term self-sufficiency. However, in the short term, Iraq remains reliant on imports to fuel its gas-fired power plants, which generate about 60 per cent of the country’s electricity.
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