Gas will be piped to southern city of Basra
- Iran has finalised a deal to double exports to Iraq
- Six-year deal involves piping gas to Basra from Assaluyeh
- There are growing commercial links between two countries in energy and power sectors
Iran has finalised an agreement with Iraq to double gas exports from 2017.
The six-year deal involves piping 20 to 35 million cubic metres of gas a day to Basra using a 270-kilometre pipeline from the gas processing hub of Assaluyeh in southern Iran.
This deal 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.
Assaluyeh is located next to Irans 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 pipelines 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.
There are growing commercial links between Tehran and Baghdad in the power and energy sectors. In early September, MEED reported that Iran-based Mapna Group will arrange financing for the 3,000MW Rumaila independent power project (IPP) near Basra in southern Iraq, The developer, Jordans Shamara Group, signed a $2.5bn contract with Mapna for engineering, procurement and contracting in July.