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Iraq and Iran have reached an agreement to commission a feasibility study of a crude oil pipeline that would export oil from Iraq’s northern fields in Kirkuk via Iran, the oil minister of Iran, Bijan Zanganeh, said on Sunday after a meeting with his Iraqi counterpart Jabar al-Luaibi.
The two ministries reached an agreement about an international company that will carry out the feasibility study of the pipeline plan, Zanganeh was quoted as saying by the oil ministry’s new service.
In February, the two neighboring countries had signed a memorandum of understanding to study the possibility to build such a pipeline.
According to the oil ministry’s news service Shana, Iran and Iraq’s oil ministers discussed bilateral energy agreements and the latest developments in the oil markets.
After the meeting, Iran’s Zanganeh voiced optimism that “by fully implementing OPEC decisions in the future months, the increasing crude inventories that put pressure on the prices reach a favorable level and we see the trend we envisage for a fair price be stabilized.”
Last month, Iran finally started exporting natural gas to its neighbor Iraq, after a four-year delay due to the challenging security situation in war-torn Iraq. The exports have started at a daily rate of 7 million cu m, according to a deputy oil minister who spoke to IRNA, as quoted by Reuters, but should reach 35 million cu m at an unspecified point in the future. The gas will be supplied under two contracts—one for exports to Baghdad power plants, and the other to Basra. Iran already supplies electricity to its energy-hungry neighbor.
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According to Zanganeh, Iran would start exporting gas to Basra in coming months.
Iran has faced some problems in receiving payments via banks from Iraq for the gas deliveries, and it is receiving cash payments, Zanganeh was quoted as saying.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.