Iran eyes June start for gas exports to Iraq

26 May 2015

Sanctions could make payments method difficult as cross-border pipeline is completed

  • Starts of exports delayed by a month
  • Two sides “not technically ready”
  • Gas will feed power plants in southern Iraq

Iran is planning to start exporting gas to Iraq at the end of June, but the sales contract will be complicated by sanctions, according to the managing director of National Iranian Gas Company (NIGC) Reza Araqi.

Tehran Times quoted Araqi says that exports were due to start in May but “the two sides were not technically ready”, stressing that there were no political issues involved in the delay.

Iran plans to deliver 4 million cubic metres a day (cm/d) of gas and raise it to 35 million cm/d to supply three power plants in southern Iraq.

Iran has been building a cross-border pipeline which was on track to be completed by the second quarter of 2015.

“Given that we are currently under sanctions, the mode of receiving the money for the exported gas is very important to us,” he told the Iranian newspaper. “If sanctions are abolished, we will easily receive money upon the presentation of an account book. But if the sanctions remain in place, we have to find a solution.”

Iran is negotiating a deal with world powers to lift sanctions in exchange for placing limits on Iran’s nuclear development programme.

Iraq-Iran relations have improved significantly since the US-led invasion of the former ousted Sunni nationalist dictator Saddam Hussein.

Iraq’s subsequent Shia-led governments have been formed with the support of Tehran, while bilateral trade rose to $12bn in 2013, making Iraq one of Iran’s top five trading partners.

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