Iraq is close to finalizing a liquefied natural gas (LNG) supply deal with Algeria, with an official announcement expected within two months, sources told the energy platform Taqa.
The agreement will supply Iraq with one million tonnes of LNG annually under a medium-term contract. This comes as Iraq seeks alternatives to replace Iranian gas imports, following increased US sanctions.
LNG shipments will begin after Iraq upgrades the infrastructure at the Khor Al-Zubair port in Basra. The upgrade plan includes installing a floating storage and regasification unit (FSRU) and a 40-kilometre pipeline that will connect to the national grid. The project is expected to be completed within five months, potentially improving Iraq’s electricity supply by the summer of 2025.
The need for new gas sources became more urgent after Iranian gas exports, which had previously supplied Iraq with 50 million cubic metres per day, stopped in early December. This was due to rising domestic demand in Iran amid a harsh winter.
The situation worsened on March 9 when the US revoked a sanctions waiver that had allowed Iraq to purchase Iranian gas. However, conflicting reports have surfaced. Farhad Alaaeldin, a foreign affairs adviser to the Iraqi prime minister, told Reuters last week that Washington had not revoked Iraq’s waiver for Iranian gas but had canceled the exemption for Iranian-generated electricity imports. He noted that 43% of Iraq’s electricity depends on Iranian gas, making it difficult to diversify energy sources.
Apart from the deal with Algeria, Iraq is also in talks with Qatar and plans to double its electricity imports from Turkey. In October, Iraq reached an agreement with Turkmenistan to supply up to 20 million cubic metres of gas per day, which will cover half of the country’s power plant needs.
Iraq’s Deputy Oil Minister for Gas Affairs, Izzat Saber, reaffirmed the country’s commitment to ending gas flaring by 2030, aiming for long-term energy independence.
In the short term, however, Iraq continues to rely on gas imports to fuel its power plants, which provide about 60% of the country’s electricity.
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