Texas-based company Excelerate Energy is one of the bidders in a tender to provide a floating storage and regasification unit (FSRU) that would welcome Iraq’s first-ever LNG imports, a senior Iraqi official told Bloomberg.
The country, which looks to shake off its dependence on Iranian gas supply for power generation, is in advanced talks with Excelerate Energy for LNG import infrastructure at the Khor Al-Zubair commodities port near Basra in southern Iraq.
U.S. firm Excelerate Energy – which offers floating LNG import terminals, LNG import infrastructure development, and LNG and natural gas supply – is one of the bidders for Iraq’s plan to begin LNG imports, Ali Salman, acting director general for the state-run South Gas Co., told Bloomberg.
South Gas is overseeing the development of the LNG import project.
Iraq has long depended on Iran for natural gas and electricity imports. Despite being a major oil producer, Iraq has historically seen high levels of flaring of associated gas instead of capturing it in a gas supply chain.
In the summer months, during peak electricity demand, Iraq often suffers from crippling blackouts and frequent outages due to unstable and insufficient supply of gas and power from Iran.
Earlier this year, Iraq’s electricity supply predicament worsened after the Trump Administration ended a waiver for Iraq to import electricity from Iran.
The U.S. Administration’s decision to let the waiver expire without extending it “ensures we do not allow Iran any degree of economic or financial relief,” a U.S. State Department spokesperson said in March.
Under pressure to reduce energy dependence on Iran for years, Iraq has been looking at alternative gas supply, including the LNG import option.
At the end of last year, Iraq signed a gas supply agreement with Turkmenistan, securing 20 million cubic meters (mcm/d) per day of gas.
“The gas to be imported from Turkmenistan will be used to operate our power stations and consolidate the national electricity network,” Iraq’s Electricity Minister, Ziad Fadil, said in October.
By Tsvetana Paraskova for Oilprice.com
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