Iran is pumping more oil to Iraq, Iran’s oil minister said with reference to the settlement of Baghdad’s all payments related to purchases from the National Iranian Gas Company.
“Last year, we received about €1 billion [$1.05 billion] and this year €1.6 billion [$1.685 billion] from Iraq regarding its gas debts to Iran,” Javad Owji was also quoted as saying by the Oil Ministry’s news agency Shana.
“The volume of gas exports to Iraq since the beginning of the current Iranian year [started March 21] has increased by 1.5 billion cubic meters compared with the same period of last year,” he added.
Iraq's electricity production has increased by 22% compared to the previous year. However, as new power plants are set to be launched in Iraq in the coming months and they rely on natural gas as feedstock, the Arab country needs to increase its gas purchases from Iran.
The National Iranian Gas Company produces close to 850 million cubic meters of gas per day, of which 90% are used domestically and the rest is exported.
Iran supplies gas through two pipelines to Iraqi power plants in Basra, Samawa, Nasiriyah and Diyala.
Iran signed a long-term strategic electricity contract with Iraq in August to provide its Arab neighbor with sustainable energy supplies.
Despite its large oil and gas reserves, Iraq relies on Iran for natural gas that generates as much as 45% of its 14,000 MW of electricity consumed daily. Iran transmits another 1,000 megawatts directly, making itself an indispensable energy source for its Arab neighbor.
Iraq has secured special waivers from the US sanctions on Iran to be able to import natural gas and electricity from its eastern neighbor.