Iran has signed a deal with Iraq to sell 35mn cubic metres of gas per day (mcm/d) to the Iraqi city of Basra for a period of 6-years, according to Iran’s IRNA.
According to the deal, signed by the Head of the National Iranian Gas Company (NIGC) Reza Araqi and Iraqi Deputy Minister of Electricity Khalid Hassan Saleh last week, Iran will supply 20mcm/d of natural gas to Basra in the cold months and 35mcm/d during the summer.
Gas exports to Basra will start with a daily volume of 7 mcm/d which could increase to 20 mcm/d in three phases, Shana reported.
The deal makes Iraq Iran’s biggest gas customer as it allows the selling of 40 mcm/d to 65 mcm/d of its gas to Iraqi cities.
Iran will start constructing the required pipelines and pressure boosting facilities within the next 1.5 years to supply the amount to Iraq, Araqi told Shana following the deal’s signature.
The gas will be fed to Iraq’s gas network from Iran’s 6th gas trunkline (IGAT 6), he added. An offshoot of IGAT will cross Iranian city of Khorramshahr to reach Basra.
IGAT 6 transfers gas from the giant offshore South Pars gas field in southern Iran to the border province of Khuzestan.
The price of the gas has been kept ‘confidential’, but it has been set ‘in accordance with regional market’s norms’, Araqi said.
“Exporting gas to Iraq will boost trade between the two countries,” Araqi said.
During the deal’s 6 year duration, 40bn cubic metres of gas will be supplied to Iraq, Azizollah Ramezani, director of international affairs of NIGC, added.
Iraq has initiated a number of development projects in its energy sector, he said. “If Iraq’s development projects fail to boost its gas output, the deal may be extended and there is room for more cooperation in this regard,” he added.
Iraq will use part of the Iranian gas to generate electricity to address its power shortage.
