Iran cuts power supply to Iraq on unpaid debt

Iran has reduced its natural gas exports to neighboring Iraq, claiming that it owes more than $ 6 billion for existing supplies. The cuts were made two weeks ago and further cuts will be made, Iranian officials said.

“The Iraqi Ministry of Electricity owes NIGC more than $ 5 billion for gas imports from Iran,” the National Iranian Gas Company was quoted as saying by Argus, adding: “Of this, $ 3 billion has been blocked and inaccessible in the [state-owned] Trade Bank of Iraq, and more than $ 2 billion has not even been released by the Ministry of Electricity. ‘

The rest of the money owned comes from ‘contractual breaches under the agreements’, NIGC said.

The agreements referred by NIGC are a daily call for delivery of 55-70 million cubic meters of natural gas, with the volumes adjustable depending on demand, Argus notes in its report. The average daily deliveries averaged 50 million cubic meters daily before the cutting work was done, which reduced the flow of gas to just 5 million cubic meters. The Iranian side said deliveries should be further reduced to 3 million cubic meters.

The NIGC statement came in response to a warning from the Iraqi Ministry of Electricity, which said that the reduced supply of gas put Baghdad and other cities at risk for power outages, Reuters reported Monday.

According to the ministry, Iraq owes Iran only $ 2.7 billion, spokesman Ahmed Moussa said in an interview with Bloomberg. Moussa added that due to the already implemented cuts, electricity production in Iraq fell by about 7 GW, leading to supply shortages.

“The purpose of exports is turnover that we use for food and medicine,” the Iranian gas company said. “After repeated warnings, which were unfortunately ignored by the Iraqi party, the company reduced the gas export volumes to Iraq according to the terms of the contract.”

By Charles Kennedy for

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