Iran and Iraq have renewed a contract for supply of natural gas from Iran to the Arab country’s power stations, according to the Iranian Oil Ministry.
Oil Ministry’s press service Shana said on Wednesday that the five-year extension on the gas supply deal between Iran and Iraq was signed earlier in the day in the Iraqi capital Baghdad.
The deal was signed between Majid Chegeni, who serves as the CEO of the National Iranian Gas Company (NIGC) and Iraq’s Minister of Electricity Ziyad Ali Fadel, the report said.
Iran has been supplying natural gas to Iraq for the past 10 years under an agreement signed in July 2013.
The supply increased to nearly 50 million cubic meters (mcm) per day in recent months after Iraq settled part of the debts it owed to the NIGC.
Iraq relies on the supply of gas and electricity from Iran for nearly a quarter of its power generation. The country has secured rounds of waivers from US sanctions on Iran to be able to import gas from its eastern neighbor.
Iran’s official IRNA news agency said in a report citing the Oil Ministry that the gas supply contract signed with Iraq provides various payment options for the Arab country. It did not elaborate.
Reports published last year suggested that Iraq had agreed to use its crude oil shipments to pay for the gas imported from Iran.
Those reports came at a time when the NIGC had reduced the flow of gas exports to Iraq to below 10 mcm per day because of arrears, causing long hours of power cuts in major Iraqi cities.
