Iraq and Turkmenistan Finalize Gas Supply Agreement

Iraq has officially signed a gas supply agreement with Turkmenistan, securing 20 million cubic meters per day (mcm/d) of gas to enhance its electricity generation capabilities, according to the several media reports. The agreement was finalized in Baghdad by Iraq’s Electricity Minister, Ziad Fadil, and Maksat Babayev, Turkmenistan’s State Minister and chairman of Turkmengas.

This new arrangement is significant for Iraq, an oil-rich nation that has faced intermittent gas supply disruptions from Iran, primarily due to outstanding debts and the complexities of payment processes caused by US sanctions. Minister Fadil emphasized that the imported gas from Turkmenistan will be crucial for operating power stations and strengthening the national electricity network.

The deal was reached after extensive negotiations concerning various aspects, including tariff prices, gas volumes, supply methods, and the contract duration. The gas will be transported using Iran’s pipeline system through a “swap” transaction facilitated by Dubai-based Loxstone Energy Company. Additionally, it was stated that the agreement would be governed by Swiss law.

Turkmenistan’s gas supply to Iraq is designed to be flexible, with 20 mcm/d allocated for the summer months and 10 mcm/d during winter. This strategic agreement is part of Iraq’s broader initiative to stabilize its energy supply amid regional challenges.

Earlier this year, the Association of the Petroleum Industry of Kurdistan (APIKUR) highlighted the urgent need to resume oil exports through the crucial Iraq-Türkiye pipeline. Spanning 600 miles, this pipeline is essential for transporting oil from the Kurdistan region. APIKUR urged the Iraqi Government to engage in immediate discussions with the Kurdistan Regional Government and international oil companies to resolve ongoing disputes and reopen the pipeline.

This new gas agreement with Turkmenistan is seen as a significant step toward enhancing Iraq’s energy security, addressing the pressing need for reliable gas supplies to support its electricity generation. As Iraq navigates the complexities of its energy landscape, partnerships like this are vital in ensuring that its electricity infrastructure remains robust and capable of meeting the demands of its population.

The collaboration with Turkmenistan reflects Iraq's efforts to diversify its energy sources and reduce its reliance on gas imports from Iran, ultimately contributing to a more stable and resilient energy sector in the region. The agreement not only promises to improve Iraq's electricity generation capacity but also positions the country as a more self-sufficient player in the energy market.

By securing this supply, Iraq aims to mitigate the risks associated with fluctuating gas imports, thus providing a more reliable energy future for its citizens. Overall, this deal signifies a positive move for Iraq's energy strategy and its commitment to improving its electricity supply.