Iraq announces interest in importing gas from Qatar
The Iraqi government has just announced a new plan that is part of a strategy to seek alternative energy sources. The Iraqi government plans to sign an agreement with Qatar in May, where Qatar will import liquefied natural gas (LNG) for the country. In this way, Iraq would be able to secure enough fuel to generate electricity and diversify its energy sources.
It would also reduce Iraq's dependence on the natural resources it imports from Iran, which to date account for a large part of Iraq's energy consumption. Iraq's Electricity Minister Adel Karim gave an interview in which he confirmed that Qatari gas would help replace Iranian gas until Iraq can begin to produce the resource itself.
"Prices are high and we have no options. We need Qatari gas to fill the shortage of Iranian gas supplies," the minister told Bloomberg media.
It is worth noting that Iraq is highly dependent on its neighbour, Iran, in terms of energy. The Iraqi government is not yet strong enough to start producing its own energy itself, so Iran is taking advantage of this situation to exert its dominance and drive up prices. This has led Iraq to spend billions of dollars to increase its gas production in order to avoid supply cuts due to high prices. These restrictions have led to major unrest in Iraqi cities in recent years.
Despite this problem, the minister has said that Axerlrite Energy, a US energy company, would be interested in providing a ship to receive the LNG so that they can convert it into gas and power themselves. However, the plan is still under study and there is no date for the agreement to be made and for this to become a reality.
Dependence on Iranian resources is still very strong in Iraq. Since 2018, the United States has taken it upon itself to economically sanction Iranian energy sales in order to pressure it to stop buying gas from Iran. This is due to the different tensions between Iran and the US; they are trying to slow down Iran's nuclear progress, which, in large part, is financed thanks to the pressures they impose on Iraq by raising prices.
For its part, the US announced an exemption of Iranian oil and gas imports for another four months. This will allow supplies to stabilise while demand grows. This will allow Iraq to pay for electricity imports. Karim revealed that Iraq had asked the US government to be able to pay in cash for amounts that have not yet been paid even though sanctions have already been imposed.
In addition, the Ukrainian conflict is worsening the global energy situation. As a consequence of the international blockade, Russia is imposing high prices on its natural resources and Iraq is also struggling to resolve this situation. In addition, internal conflicts in the country due to the control of Daesh in the area have led to decades of shortages, and there is concern that in summer, when the temperature reaches very high temperatures of up to 50 degrees Celsius, there are no engines to turn on air conditioners. The executive is concerned that the Iraqi population will protest.
Although Iraq is OPEC's second largest oil producer, it needs to import gas to meet its energy needs. The nation is working on setting up several gas fields to produce LNG with international companies such as Aramco and Halliburton. According to the government, a plan is being prepared to develop these fields to produce 80 per cent of the nation's gas. But even so, it would still need to import LNG for the summer months.
If these projects can be created and realised, the use of oil to produce electricity would be significantly reduced and new projects could be created to achieve gas energy self-sufficiency by 2025.
