ERBIL, Kurdistan Region - Iranian gas is more competitive than other options, a former electricity minister said at the Erbil Forum on Friday. Baghdad is under pressure from Washington to end its energy dependence on its neighbour.
"Iranian gas is much more competitive when compared to other sources," said former Iraqi electricity minister Luay al-Khateeb, speaking on a panel titled “Regulation of Oil and Gas Demand and the Future of Energy Transmission in Iraq.”
For years, Iraq’s electrical grid has depended on gas imports from Iran and Baghdad received sanctions waivers from Washington. The new American administration, however, is reviewing its waiver policies.
Imports from Iran are also frequently interrupted. This winter, Iran has experienced a natural gas shortage.
Iraq is looking to capture and use its own natural gas, ending the deadly and toxic practice of flaring associated gas at its oil fields.
When Iraq’s current government took office, “47 percent of gas was being flared. Each 1 percent is worth $1 billion,” Izzat Sabir, Iraq's deputy oil minister for gas, said on the panel.
Iraq is second only to Russia in terms of the amount of gas burned off, though the Iraqi population lives on average much closer to the flaring sites than Russians do. In the 2015 Paris Agreement, Iraq made a commitment to eliminate flaring by the end of the decade.
"Iraq's plan is to flare no gas by 2030,” Sabir said, adding that "Iraq has enough gas for the next 111 years."
In January, Sabir told Rudaw that Iraq needs $10 billion to eliminate gas flaring by the deadline, expressing confidence that the goal could be achieved even sooner.
Speaking on the panel, Sabir highlighted cooperation between Iraq and the Kurdistan Region in the gas sector.
"It is very important for Iraq and the Kurdistan Region's relations in the gas sector to be complementary. Iraq should benefit from the Kurdistan Region when needed and vice versa, based on contracts and mutual benefit," he said.
He added that Iraq’s Prime Minister Mohammed Shia’ al-Sudani approved an increase in the amount of gas delivered to the Kurdistan Region for domestic consumption.
Kurdistan Region’s oil exports are expected to resume after a nearly two-year stoppage.
Matthew Zais, a vice president at HKN Energy and former US Assistant Secretary of Energy, said on the same panel that “next month will mark the two-year anniversary of the pipeline closure. This event is emblematic of a substantial lose-lose situation for Iraq, where the Iraqi people are losing significant revenue from the Kurdistan Region."
The exports were stopped in March 2023 after the International Court of Arbitration ruled in Iraq’s favor that Turkey had violated a 1973 pipeline agreement when it allowed the Kurdistan Region to independently export oil. The final hurdle in negotiations to resume exports was resolved earlier this year when the Iraqi parliament passed an amendment to the federal budget to increase transportation and production fees paid to oil producers.
Iraq’s oil minister on Friday said the resumption of exports will be announced “in the coming hours.”
Exports will begin at a rate of 185,000 barrels per day and gradually increase to the level set in the federal budget, according to a ministry statement.
Zais said that the Kurdistan Region's oil production has dropped to 300,000 barrels per day.
Prior to the suspension, Erbil was exporting approximately 400,000 barrels of oil per day through the Iraq-Turkey pipeline, along with an additional 75,000 barrels per day from Kirkuk.
Oil producers operating in the Kurdistan Region have said they are ready to resume exports but first require a formal agreement on payments.
