EghtesadOnline: Iran’s daily gas supply to the Iraqi capital Baghdad has increased to 12 million cubic meters from about 7 mcm/d since supply began in June, the managing director of National Iranian Gas Company said on Tuesday.
“Gas exports to the southern city of Basra will probably start in March 2018,” IRNA quoted Hamidreza Araqi as saying, stressing that gas pipelines to the Iraqi cities make up Iran’s most important gas trade projects.
Iran began supplying Iraq with natural gas almost four years after the two countries signed a preliminary export deal.
Based on the terms of the agreement, exports will increase to 35 million cubic meters daily, nearly three times the current rate. The agreement includes two contracts, one to send gas to Baghdad and another to Basra, according to Financial Tribune.
On problems with Iraqi payments for the imports of Iranian gas, the official said financial barriers for receiving gas money from the western neighbor have been removed.
Oil Minister Bijan Namdar Zanganeh said in August Iranian and Iraqi banks did not connect easily, because most of the Iraqi banks were controlled and run by the Americans.
Araqi noted that the Iranian segment of the pipeline to Basra is ready, but the Iraqi administration has problems with the contractor of the Iraqi section.
“The contractor has pledged to complete the remaining segment in the next three months,” he added.
The war-ravaged Arab country needs Iran’s gas to feed three of its power plants and alleviate chronic outages that have sparked protests against the government in Baghdad in the past few years, particularly during the hot summer season when electricity demand soars.
Iraq has now become Iran's second largest gas customer behind Turkey, which imported about 21 mcm/d in 2016, according to the latest BP Statistical Review of World Energy.
Iran with 34 trillion cubic meters) and Russia (with 32.6 tcm) hold the largest proven gas reserves, according to BP.
The Persian Gulf nation aims to raise output to over 1 billion cubic meters by March from around 880 million cubic meters daily.