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Iranian gas prices are straining the Iraqi budget, MP says

Category: Economy

Date: 2020-12-18T16:51:13+0000
Iranian gas prices are straining the Iraqi budget, MP says

Shafaq News / The Parliamentary Oil and Energy Committee revealed that it would resort to the Ministries of Oil and Electricity to invest gas associated with oil in operating electric power plants, instead of wasting it.

A member of the committee, Zahra Al-Bajari, told Shafaq News agency, "Iraq annually burns more than 15 billion cubic meters of gas associated with oil production", noting that, "there are provisions that oblige oil companies to take advantage of this gas instead of burning it and polluting the environment."

She added, "Iraq imports gas from Iran in large quantities and at very exorbitant prices in order to generate electric power, and this constitutes a major defect considering that Iraq is one of the first oil-producing countries", adding, "the Parliamentary Oil and Energy Committee will propose to take advantage of local gas instead of Iran's in generating electric power."

The spokesman for the Ministry of Electricity, Ahmed Moussa, had mentioned in an interview with Shafaq News agency, "Iraq has contracts with the Iranian side to supply electrical production stations by 50 million cubic feet of gas", indicating, "Iran has reduced gas supplies to 5 million cubic feet after it was 10 million cubic feet a few days ago."

"The decrease in the supply harmed the production of the electrical system, as it lost between 5 and 6 thousand megawatts, and thus negatively affected the hours of electricity supply."

On December 10, a source in the Electricity Production Company for the Central Region at the Ministry of Electricity revealed in a statement to Shafaq News agency that the price of a megawatt MW from the investor for the Pasmayah gas station for sixty minutes according to the existing load is up to 41 dollars, while the price of Iranian gas fuel is currently $ 57, indicating that "the cost of generating electricity in total amounts to $ 98 per hour."

He added, "Because of the cost of Iranian imported gas, we ask the Oil Pipelines Directorate of the Ministry of Oil to extend a gas pipeline to the Pasmayah station from Yusufiya, Al-Ahdab field, or the Dora refinery," noting that the cost of local gas amounts to about $ 12 per hour. 

British Petroleum data shows that Iraq buys Iranian gas at $ 11.23 per thousand cubic feet, compared to about $ 6.49 paid by Kuwait to buy liquefied gas.

A report by the Washington Institute for Near East Policy says that Iraq is currently wasting nearly $ 2.5 billion annually due to burning gas associated with oil extraction, which amounts to 1.55 billion cubic feet per day, equivalent to 10 times the amount imported from Iran.

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