Iraq will begin natural gas imports from Turkmenistan in the near future after the two countries signed a preliminary agreement for gas supplies to help meet the power generation needs of OPEC's second-largest producer after Saudi Arabia.
Despite being rich in oil and gas, Iraq has had to import gas from neighboring countries, including Iran, for fuel at its power plants.
Iraq lacks the gas processing plants necessary to process the associated gas extracted from its massive oilfields and continues to flare some of those gas volumes.
Iraq imports gas and electricity from Iran but has had trouble paying for those because of the U.S. sanctions on Iran's energy sector. The U.S., while endorsing the Iraq-Iran energy deals to keep Iraq supplied with power and gas, has been pushing Baghdad to reduce its reliance on Iranian energy imports.
The deal with Turkmenistan could serve the purpose of reducing imports from Iran.
The undersecretary for gas affairs at the Iraqi Ministry of Oil, Ezzat Saber, said on Thursday that during a visit of Iraqi officials to Turkmenistan "it was agreed in principle to import quantities of gas to meet part of the needs of electric power plants, according to a memorandum of cooperation being prepared for this purpose," according to a statement sent to the Iraqi News Agency (INA).
Saber expects to sign the agreement before the end of this year, which will include details of the proposed import quantities and mechanisms to be adopted between the two countries.
Little known outside Central Asia but one of the biggest states there, Turkmenistan is home to the world's fourth-largest natural gas reserves, with a total of some 19.5 trillion cubic meters, according to BP's statistical review.
Production is low, however, at just some 59 billion cubic meters in 2020, most of which was exported to China because domestic consumption is also relatively low. The country also exports gas to its Central Asian neighbors.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com More