Iran prepares to sign gas deal with Iraq

16 August 2015

Agreement to be signed within two weeks

  • Draft agreement has been prepared
  • Deal is based on a preliminary agreement that was signed in 2013
  • Latest agreement comes after four days of discussions

Iran has prepared a draft agreement to build export natural gas to Iraq, according to an official statement published by the government-controlled Islamic Republic News Agency (IRNA).

Azizollah Ramezani, the director of International Affairs at Iran’s National Gas Company, told IRNA that the draft agreement was finalised after four days of discussions between the representatives from the two countries.

Ramezani said both countries are expected to sign the agreement within the next two weeks.

The latest agreement between Iran and Iraq is based on a preliminary gas deal that was signed in July 2013.

Under the terms of the original deal, Iran agreed to supply Iraq with 850-1,000 million cubic feet a day (cf/d) of gas, via a 270-kilometre pipeline from the gas processing hub of Assaluyeh in southern Iran.

Assaluyeh is located next to Iran’s giant offshore South Pars gas field, which the government has been developing in 28 phases, some of which have been hit by major contracting delays.

The imported Iranian gas will be used to feed three power plants in the Baghdad and Diyala provinces.

The pipeline’s construction has seen a series of delays due to the unstable security situation in Diyala province and property issues, according to statements from the electricity ministry.

In June 2014 construction work on the Iran-Iraq pipeline was 75 per cent complete, according to official reports.

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