Iran has reduced natural gas exports to neighboring Iraq, claiming it owed more than $ 6 billion for supplies already made. The cuts were made two weeks ago and new cuts will be made, Iranian officials said.
“The Iraqi Ministry of Electricity owes more than $ 5 billion to NIGC for gas imports from Iran,” the National Gas Company of Iran said, citing Argus, which added: [state-owned] Trade Bank of Iraq, and more than $ 2 billion have not even been released by the Ministry of Electricity. “
The rest of the owner’s money comes from “contractual offenses under the agreements,” NIGC said.
The NIGC agreements refer to the call for daily deliveries of 55-70 million cubic meters of natural gas, with volumes adjustable based on demand, Argus notes in its report. The average daily deliveries were 50 million cubic meters per day before making the cuts, 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 responded to a warning from the Iraqi Ministry of Electricity, which said the reduction in gas supply put Baghdad and other cities at risk of power cuts, Reuters reported on Monday.
According to the ministry, Iraq only owes Iran $ 2.7 billion, spokesman Ahmed Moussa told Bloomberg in an interview. Moussa added that due to the cuts already implemented, electricity production in Iraq had fallen by about 7 GW, leading to a shortage of supply.
“The goal of the export is revenue, which we use for food and medicine,” the Iranian gas company said. “Therefore, after repeated warnings, which were unfortunately ignored by the Iraqi side, the company has reduced gas export volumes to Iraq, in accordance with the terms of the contract.”
By Charles Kennedy for Oilprice.com
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