Iraq Aims to Close Qatar Gas Import Deal to Add Supply
Iraq Aims to Close Qatar Gas Import Deal to Add Supply
(Bloomberg) -- Iraq plans to sign a deal next month to import liquefied natural gas from Qatar in an effort to secure enough of the fuel used for power generation and to diversify its sources of supply.
Buying Qatari LNG will help replace some of the gas currently piped from Iran, Iraqi electricity minister Adel Kareem said in an interview. Iran has had trouble meeting Iraq’s gas needs due to its own domestic demand, Kareem added.
“The prices are high but we have no options. We need energy,” Kareem said. “We need the Qatari gas to fill in the shortage in the Iranian gas supplies.”
Iraq is spending billions of dollars to ramp up its own gas output to avoid supply disruptions that have contributed to severe power outages and unrest in recent years. U.S. firm Excelerate Energy Inc. may supply a vessel to receive and regasify the LNG from Qatar, Kareem said.
The minister plans to lead a delegation to Iran soon to discuss supply and methods for payment. The U.S. has pushed Iraq to stop buying Iranian gas and has placed sanctions on Iranian energy sales and other business with the country to pressure the Islamic republic into a deal to limit its nuclear program.
Global gas prices have been highly volatile since the war in Ukraine sparked concern that Russia would cut off supplies or that European buyers would face pressure to stop purchasing that fuel. Prices have surged amid a shortage in Europe and as the Russian invasion sparked a scramble for new supplies.
Iraq, which is second only to Saudi Arabia in oil production among Organization of Petroleum Exporting Countries members, may be able to supply crude buyers globally, but needs to import gas to keep its own lights on. Supply is especially tight during the Persian Gulf’s scorching summer months when temperatures can reach 50 degrees Celsius (122 Fahrenheit).
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