Iraq’s Minister of Electricity, Ziyad Ali Fadel, and the Chairman of the State Concern "Turkmengas," Maksat Babayev, recently signed a gas supply agreement.
Under the contract, Turkmenistan commits to supplying Iraq with 10 million cubic meters of natural gas per day in the winter and up to 20 million cubic meters in the summer, reports the Iraqi news agency INA.
In case of supply issues, the contract includes provisions for compensating the same amount of methane, highlighting the seriousness of the parties' commitments.
Long-term Plans and Cooperation
The new agreement builds on previous arrangements signed a year ago, which outlined Turkmenistan’s intent to supply Iraq with a total of 9 billion cubic meters of gas annually over five years.
The supplies will follow a swap scheme: Turkmenistan will transfer gas to Iran, and Iran will then deliver it to Iraq. The Swiss company "Loxstone Energy" will act as an intermediary in the deal.
Iraq is currently facing electricity shortages and relies heavily on gas imports from Iran, a dependency complicated by Iraq’s debts and U.S. sanctions.
Gas deliveries from Turkmenistan are expected to stabilize Iraq’s energy supply. Moreover, Iraq is exploring agreements with other suppliers and planning to develop its domestic gas projects.
Challenges and Prospects for Turkmenistan
Despite its efforts to expand markets, Ashgabat faces several challenges as a gas supplier. These include economic difficulties of buyers, accidents at gas facilities, and internal mismanagement.
For example, Uzbekistan abandoned a new contract after an accident at the "Galkynysh" field, and significant volumes of Turkmen gas are directed to China to repay loans. Under such conditions, Turkmenistan is actively seeking new partners and developing alternative markets.
Turkmenistan's Gas Exports: Destinations and Volumes
Turkmenistan is one of the largest natural gas exporters globally, with China being its primary market.
In 2023, Turkmenistan exported around 40 billion cubic meters of gas to China, with much of it used to pay off debts.
Apart from China, Turkmenistan exports 4-5 billion cubic meters of gas annually to Russia. Through swap deals, Ashgabat also supplies gas to the Islamic Republic of Iran, which then resells it to Iraq.
CentralasianLIGHT.org
October 23, 2024