TEHRAN: A gas pipeline between Iran and Iraq will be unveiled Tuesday (today), though exports to the latter will remain at a standstill, a spokesman for National Iranian Gas Company (NIGC) said.
“Iran is ready to inject gas into the export pipeline; the Iraqi side is still unprepared to receive Iran’s natural gas,” remarked NIGC spokesman Majid Bujarzadeh.
Earlier, Iranian Deputy Oil Minister for International Affairs Amir Hossein Zamaninia said the pipeline for gas exports to Baghdad was replete with natural gas, but Letters of Credit (LCs) needed to be opened first for the process to begin.
He noted that banking issues had to be fully resolved before Iranian gas could be supplied to Iraq, explaining that “a letter of credit is a letter from a bank guaranteeing that a buyer’s payment will be received by the seller on time and for the correct amount.”
Being part of the sixth national pipeline, which will transmit gas to Iraq, it will be inaugurated, but exports will not begin. NIGC Managing Director Hamidreza Araghi will attend the unveiling ceremony on Tuesday.
The second part of the sixth national pipeline with a length of 600 km is still under construction. The national gas pipeline network has the capacity to carry 110 million cubic metres per day and it will supply natural gas to Iraq and Syria.
NIGC and the Iraqi Ministry of Electricity and Power signed a gas contract in 2013 and in 2016 the scope of the deal was extended in order to increase the export volume and duration. Accordingly, seven million cubic metres per day will be exported initially and the volume will touch the highest level in line with the contract after 21 months.
As such, in hot seasons 35 and in cold ones 25 million cubic metres of natural gas will be supplied to the Baghdad region, yielding an aggregate of 10 billion cubic metres per year.
A deal for gas exports to Basra was inked in 2015. According to the agreement, 35 and 25 million cubic metres of natural gas will be exported to the Iraqi region in hot and cold seasons, respectively.
Though nearly three years have passed since the signing of the gas contract between Iran and Iraq, gas exports have remained at a standstill as delays have mainly been caused by activities of the Islamic State terrorist group as well as Iraq’s failure to fulfil the financial claims of contractors.
