ERBIL, Kurdistan Region — Tehran wants to play a strategic role in rebuilding the electricity infrastructure in Iraq over the next three years despite US sanctions, Iranian Energy Minister Reza Ardakanian told an Iranian news agency on Sunday.
Successive Iraqi governments have been unable to provide 24-hour electricity to the public since the 2003 war. Blackouts are a daily occurrence across Iraq and the Kurdistan Region and have become a soaring source of resentment.
“Right now, we are planning to play an important role in rebuilding the Iraq electricity sector in the framework of a three year plan,” Reza Ardakanian told Tasnim news agency on Sunday. “In the last visit to Tehran by the Iraqi electricity minister, we signed memorandum of understanding, and as far as we are aware, the agreement to continue providing electricity to Iraq from Iran will continue for another year.”
Unlike other oil producing Gulf states, Iraq burns more than 60 percent of its associated gas which is equivalent to 196,000 bpd of crude oil. To deal with the recurring blackouts, Baghdad has relied on
imported gas from its powerful eastern neighbor since 2005 to use in gas turbine power plants.However as the Donald Trump administration took increasingly aggressive postures against Tehran, the electricity crisis fueled protests in oil-rich Basra last summer.
As a whole, Trump sanctioning approach in trying to bring down Iran energy export to zero has ran afoul. Washington has given two exemptions to Iraq one 45 days in November and the other a 90 day waiver in December which will run out this month for Iraq to stop importing gas from Iran to use in electricity generating plants.
The Iranian minister Ardakanian said that Iran is the best option for the neighboring countries dealing with shortage of electricity: “Over the last years, we have imported over $6 billion of electricity to Iraq, and we have received over $5 billion and we have reached arrangements for the rest of the payment and god willing there will be no complications.”
Iraq imports 900-1,300 MW of electricity from Iran per year, according the US Information Energy Agency (EIA). “From 2006 to 2016, distribution losses averaged 42% of total electricity supply,” EIA detailed.
Iraq produces 16.9 GW of electricity, but is capable of producing 26.2 GW, added EIA. The Iraqi electricity minister blames “mismanagement” by his predecessors for a lack of funds which will not allow Baghdad to sign multi-billion dollar deals with Siemens or General Electric to update the power grid.
The Kurdistan Regional Government previously has imported electricity from Iran to deal with its constant power shortages but now plans to utilize the natural gas produced in the region to generate more electricity.
However, that stopped five years ago.
“The Kurdistan Region has not imported any electricity from Iran or Turkey since 2014 because of the financial crises but also because the KRG wants to rely on its own resources,” Mohammad Amin Hawramani , an advisor at the KRG electricity ministry, told Rudaw English.
Dana Gas, an Abu Dhabi based natural gas company that operates the Khor Mor field in the Kurdistan Region, provides natural gas to local power plants in the region to generate electricity. The company said in a press statement in November that it has increased its natural gas production by 30 percent and “will soon supply a new plant in Bazian [Sulaimani province]…” in addition to two other plants.
Iraqi Prime Minister Adil Abdul Mahdi will face a challenge this summer when electricity consumption soars with temperatures hovering around 50 Celsius. Abdul-Mahdi says he is prioritizing services in his government.
