Iran has scaled back natural gas exports to its neighboring country, Iraq, and claims this country owed more than $ 6 billion for supplies already delivered. The cuts were implemented two weeks ago and more cuts will be made, Iranian officials said.
“The Iraqi Ministry of Electricity owes more than $ 5 billion to NIGC for gas imports from Iran,” said the National Iranian Gas Company, as quoted by Argus, adding, “Of this, $ 3 billion has been blocked and not. accessible in the [state-owned] Trade Bank of Iraq, and more than $ 2 billion has not even been released by the Ministry of Electricity. “
The rest of the money in possession comes from “contractual violations under the agreements,” said NIGC.
The agreements mentioned by NIGC refer to the call to supply a total of 55-70 million cubic meters of natural gas per day, with volumes adaptable to demand, Argus notes in its report. Average daily deliveries averaged 50 million cubic meters per day before the cuts were implemented, reducing gas flow to just 5 million cubic meters. Deliveries will be further reduced to 3 million cubic meters, the Iranian side said.
The NIGC statement came in response to a warning from Iraq’s electricity ministry, which said Baghdad and other cities are at risk of power outages due to reduced gas supplies, Reuters reported Monday.
Iraq only owes Iran $ 2.7 billion, spokesman Ahmed Moussa told Bloomberg in an interview, according to the ministry. Moussa added that as a result of the cuts already implemented, electricity production in Iraq had dropped by about 7 GW, leading to a shortage of supply.
“The purpose of exports is revenue, which we use for food and medicine,” said the Iranian gas company. “Therefore, following repeated warnings, unfortunately ignored by the Iraqi side, the company has reduced its gas exports to Iraq, in accordance with the terms of the contract.”
By Charles Kennedy for Oilprice.com
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