Economy News – Baghdad
Challenges in Securing Iraq’s Natural Gas Supply Amidst Iranian Import Halt
The Anbar Provincial Council’s Adnan Al-Kubaisi indicated on Wednesday that Iraq is facing significant challenges in securing its natural gas supply following the cessation of imports from Iran.
Al-Kubaisi noted, “The Iraqi government has engaged a Ukrainian firm to develop the Crutch field, yet there are concerns regarding the company’s effectiveness and reliability.” He highlighted that the president of the Ukrainian Chamber of Commerce voiced skepticism about the company’s capacity to execute the project, despite having provided financial guarantees amounting to $50 million.
“Since the contract was signed a year ago, there has been minimal tangible progress, apart from the establishment of several caravans at the excavation sites,” Al-Kubaisi explained, raising alarms about the company’s ability to meet the project’s required standards.
He further elaborated that “the field’s revenues are calculated based on an equation of 150 cubic meters of gas for two dollars, emphasizing the project’s economic significance.” Al-Kubaisi also disclosed plans for the construction of a complex gas station near the Syrian border, which will utilize gas extracted from the Crutch field, with an anticipated electricity production capacity of 1,642 megawatts. This initiative is expected to enhance energy supply for the Anbar Governorate while bolstering the national electricity grid.
Al-Kubaisi underscored the necessity of reinforcing governmental oversight over executing companies, asserting that “Iraq requires international firms with expertise to effectively harness this vital resource.”
Concluding his remarks, Al-Kubaisi stated that “there is governmental backing for the project; however, effective implementation necessitates direct supervision to ensure the realization of desired outcomes for Anbar and Iraq as a whole.”
The Crutch field stands as the second-largest gas field in the Middle East, and its optimal investment could yield over 10,000 job opportunities in its initial phase, alongside generating significant financial returns for the Anbar Governorate.
In a related development, a spokesman for the U.S. State Department communicated that the Trump administration has terminated exemptions previously granted to Iraq for purchasing electricity from Iran, indicating that Washington will not permit any economic or financial relief to Tehran.
Iraq heavily relies on Iranian gas to power its electrical grids and is now confronted with the challenge of finding adequate alternatives to maintain stable energy supplies, particularly during peak summer months.
Furthermore, Walid Al-Sahlani, Vice-Chairman of the Electricity Committee in the Iraqi Parliament, noted that the halt of Iranian gas imports could result in a loss of 8,000 megawatts from the country’s electricity system.
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