On Tuesday the electricity minister said Iraq would strive to generate enough electricity except it continues to make use of Iranian gas for three to four more years – countering U.S. pressure to halt the imports from its Middle East neighbor.
Iranian oil exports have dropped since the United States forced new sanctions on Iran this year, in search of to confine the Islamic Republic in a fight over its nuclear ambitions.
Iraq has a U.S. reservation to import Iranian gas. However, Washington has been pushing Baghdad to part them out.
Power cuts in Iraq have typically prompted protests in opposition to the authorities. Iran supplies enough fuel to power 2,500 megawatts (MW), as well as offering Iraq with 1,200 MW indirect power supplies.
The minister stated Iraq now had the capability for 18,000 MW, up from 12,000-15,000 MW final year however still below peak demand that would attain about 25,000 MW and was rising yearly.
Exports of gas to Iraq and exports of distilled products to world markets stay an essential supply of revenues for Iran.
The minister stated the power sector wanted investment price at least $30 billion to improve the grid, which was 50 years old and had lost 25% of its capacity due to Islamic State attacks.
Al-Khateeb said Iraq was paying for Iranian fuel based on a system averaging around 11% of the value of benchmark Brent crude oil or about $6 per million British thermal units (MBTU). This corresponds to $2-$3 per MBTU within the glut U.S. market.
Iranian gas imports could be reduced if Iraq used extra of its gas reserves relatively than splaying it or burning off the related gas that is produced during oil extraction.