Iran, Iraq negotiating on money exchange mechanism to start gas exports

Business Materials 23 May 2015 11:46 (UTC +04:00)

Baku, Azerbaijan, May 23

By Fatih Karimov - Trend: Iran is currently negotiating with Iraq on a mechanism for receiving gas export money as Iran is under economic sanctions, said Managing Director of the Iranian National Gas Company Hamidreza Araqi.

"Considering that the country is under sanctions, the method of receiving gas exports money is very important for us," Iran's IRNA news agency quoted Araqi as saying on May 23.

"If the sanctions are lifted, we will be able to receive the money conveniently. But, if the sanctions remain, we should find another way," he added.

He further said that Iran will start gas exports to Iraq in the current Iranian calendar month of Khordad (to end on June 21).

Gas exports will start with a month of delay after finalizing tests on the transfer pipeline, he added.

Although it had been previously announced that Iran will start export to Iraq in the second Iranian fiscal month of Ordibehesht (ended on May 21), but technical infrastructures were not ready, he said, adding that gas exports will start latest by June 21.

Iraq needs Iranian gas to use in its power plants. The country's gas reserves are about 3.6 trillion cubic meters, about 10 times less than Iran. About three-fourths of Iraq's natural gas reserves are associated with oil. Currently Iraq produces only 0.6 bcm/d of refined gas.

Iraqi gross natural gas production was about 20 bcm in 2012, of which 12 bcm (58 percent) was vented and flared. Natural gas that is not flared is mostly used for re-injection into oil wells to increase oil recovery rates.

Iran has five major cross-country pipeline projects, of which four -worth $13.7 billion- are aimed towards gas export to Pakistan, Iraq, Turkey and Oman.