Iraq Says Needs 4 Years to Wean Itself Off Iranian Energy Imports
With just three days remaining to the expiry of a 30-day US waiver to import Iranian gas and electricity, Iraq will struggle to drum up some $10 billion in investments over a four-year period to stop these imports at a time when US patience with OPEC's second-largest oil producer is wearing thin.
The 30-day waiver, the shortest since Iraq started getting exemptions in 2018, is complicated by geopolitics as Iran still wields power in Iraq at a time when a caretaker government has been in charge since late last year and a third prime minister designate is yet to form a cabinet, S&P Global reported.
"We need three to four years’ allowance in time for the ministry of oil to develop the key projects that it is working on to increase the gas capability and provide the necessary feedstock for the gas to power stations," Electricity Minister Luay al-Khatteeb told Platts.
"Those three to four years need to be an uninterrupted timeline with a government that enjoys full executive authority and no interferences from political entities and in an environment that is welcoming to investments and multinational participations."
The country can import up to 1,200 megawatts of electricity per year and up to about 30 million cubic meters per day during peak usage in the hot summer months when temperatures in the southern part of the country can soar to 50 Celsius.
Electricity supply was estimated at 19 gigawatts in 2019 and forecast to reach 20 GW in 2020, while power demand in peak time is around 25 GW, the minister said.
To replace Iranian gas and electricity, the country needs to generate around 37 mcm/d of gas at a cost of up to $10 billion, Harry Istepanian, a senior fellow at the Iraq Energy Institute, said, citing a World Bank study.
source: Financial Tribune
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