Iraq confronts a potential energy crisis as it loses a US exemption for Iranian gas imports. Sanctions could jeopardize 40% of its electricity supply, prompting officials to seek alternatives and investments swiftly. Steps are being taken to diversify energy sources, including partnerships for solar energy and agreements with Turkmenistan to reduce reliance on Iran.
Iraq faces an impending energy crisis following the conclusion of a US exemption allowing Iranian gas and electricity imports. This cancellation is part of President Donald Trump’s executive order aimed at curtailing Iran’s oil exports and limiting its energy transactions through the US financial system. In response, Iraq has initiated urgent contracts with various nations and firms to mitigate potential energy shortages due to the sanctions.
A primary concern, as highlighted by Bassem Naghimash, a member of the Iraqi Parliament’s Oil and Gas Committee, is Iraq’s insufficient diversification of gas sources. Despite considering alternatives like Jordan, Turkmenistan, and Qatar, infrastructure and governmental support challenges have inhibited domestic gas solutions. He emphasized the need for investment to improve Iraq’s energy security amid increasing reliance on Iranian imports.
Kazem Al-Touki, another committee member, elaborated that while Qatar was initially viewed as a viable supplier, US sanctions complicate the situation due to the Iranian ownership of a related intermediary firm. He acknowledged the necessity for dialogue with ministers of oil and electricity to explore potential solutions to Iraq’s energy dependency.
Economic expert Nabil Al-Marsoumi articulated that Iran supplies about 40% of Iraq’s electricity, presenting severe implications should sanctions be implemented fully. He asserted the Iraqi government must navigate significant pressure from the US while balancing energy requirements. Al-Marsoumi also recommended developing LNG import capabilities and solar energy projects as sustainable solutions to Iraq’s energy shortages, potentially adding an estimated 3,000 MW within three years.
Iraq has taken preliminary steps to address these challenges, having signed a deal with Turkmenistan in August 2023 to import gas. The electricity minister affirmed that imports from Turkmenistan could potentially decrease reliance on Iranian gas by half, although domestic enhancements will require three to five years for full implementation.
To further strengthen its energy infrastructure, France’s TotalEnergies inked an agreement with Basra Investment Commission to establish a 1,000-MW solar power plant, projected to aid the Basra region’s electricity grid. The $820 million solar project, set to be developed over three years, is expected to utilize modern technology to maximize efficiency and output.
Iraq’s energy sector stands at a crucial juncture, facing mounting pressure from US sanctions on Iranian gas imports. The urgency for diversification and sustainable energy projects has been underscored by officials and experts, suggesting that prompt investments and infrastructure developments are imperative to mitigate potential crises. Initiatives such as the partnership with TotalEnergies may play a significant role in bolstering Iraq’s energy independence in the coming years.
Original Source: www.intellinews.com
