While Turkmenistan’s Minister of State Maksid Babayev was visiting Baghdad Iraq’s Electricity Ministry signed a deal to import natural gas from the Central Asian country. Experts say this will not really do much to meet Iraq’s demand and that it would be better off developing its own gas fields which are far behind schedule.
On October 19 Turkmenistan’s Minister of State Maksid Babayev arrived in Iraq’s capitol. He met with Electricity Minister Ziad Ali Fadhil and they finalized a deal to import 20 million cubic meters of natural gas per day which will go to power plants. This completes an August 2023 memorandum of understanding between the two countries. The gas will be delivered by the Swiss firm Luxton Energy and will use Iranian pipelines.
Iraq currently relies upon Iran for gas to power some of its power plants but it has proven to be an unreliable partner. At the start of October it was reported that Iraq lost 25% of its electricity production in part because Iran was renovating its gas pipelines. Iran’s exports to its neighbor have consistently gone up and down which has a great impact upon Iraq. It’s for that reason that Baghdad has looked to other countries for supplies.
Two analysts interviewed by Al Aalem were highly critical of the agreement. One energy expert said requiring Turkmenistan, a Swiss company and Iran to deliver the gas was not a good sign because if anything happened to one of them the gas could stop flowing. He also noted that the amount Turkmenistan will deliver will do little to meet Iraq’s demand. An economic analyst said that going through Iranian pipelines would put a high price on the gas due to fees. Both said that Iraq would be better off developing its own natural gas as huge amounts are wasted everyday by burning it off.
Iraq has been in talks with foreign companies since 2008 to work on its natural gas but it has been a very slow process. Iraq lacks infrastructure such as pipelines and storage facilities. The government doesn’t have qualified personnel to negotiate and manage contracts since most of them get their jobs through political patronage rather than competency. Finally, corruption is a huge factor as well. Gas production has gone up each year but at a very slow pace. Despite this the authorities continue to overpromise as usual. The latest came from Oil Minister Ghani who said that gas flaring would end in 2028. That seems unlikely which means that continued imports are a necessity.
SOURCES
Al Aalem, “Turkmen gas via Iranian pipelines … will it meet electricity needs?” 10/20/24
- “Turkmenistan Minister of State arrives in Baghdad .. and selling natural gas tops his agenda,” 10/19/24
Iraqi News, “Iraq’s electricity output drops by 7,600 megawatts,” 10/17/24
Al Mada, “Instead of investing Iraq is wasting huge gas wealth by burning it,” 7/10/24
Middle East Monitor, “iraq Diyala hit by power outages as Iranian lines cut,” 8/1/24
Rudaw, “Iraq loses 25% of its power output,” 10/9/24
Salem, Amr, “Associated gas utilization in Iraq jumps to 61%,” Iraqi News, 7/9/24
- “Iraq to stop gas flaring by the end of 2028,” Iraqi News, 9/12/24
Xinhua, “Iraq signs deal with Turkmenistan to import gas for power plants,” 10/19/24
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