Page 8 - AsianOil Week 01 2021

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in order to cater to strong demand. Baghdad would export 700,000 tonnes of barley
As on previous occasions, the reduction to Iran for $125 per tonne as part of the repay-
was blamed on Baghdad’s unpaid bills for gas ment plan, with cash and other goods to be used
supplies. However, Iran has struggled to cover in a partial barter arrangement.
domestic demand this winter and that situa-
tion was exacerbated by a pipeline explosion in Shortages
December which took around 15 mcm per day Around 95% of Iran’s population is connected to
of gas from the South Pars field offline. the country’s gas grid and it is among the world’s
top five gas consumers, with demand peaking at
Finances the end of the year. In November, it emerged that
In July 2021, gas supplies from Iran dropped Tehran had resorted to tapping gas storage facil-
by 19 mcm per day, reducing Iraqi capacity by ities as demand outstripped supply, with output
1,000 MW. Exacerbating the situation, trans- running at around 1.27 bcm per day from South
mission lines in the Iraqi governorates of Diyala, Pars, other gas fields and flows associated with
Kirkuk and Salah ad Din were targeted by attacks oil production.
understood to have been carried out by Daesh This saw the National Iranian Gas Co.
militants. (NIGC) call on Iranians to monitor and limit Gas feedstock
The MoE said that “great and high co-ordina- household gas usage, keeping temperatures at
tion” had been held between the oil and energy 18-21°C. Work remains ongoing to complete will be vital to
ministries of the neighbours to compensate for the final phase of South Pars’ 24-part develop- the power and
the reduced volumes. ment plan, while efforts were recently kicked
Gas supplies to Iraq were also cut in Decem- off to explore previously untapped areas of petrochemical
ber 2020, with Baghdad owing its neighbour the supergiant asset as part of plans to invest
more than $6bn for gas already provided, but around $11bn to add another 240 mcm per day elements of these
on that occasion an agreement was reached days of production.
later by Iranian Energy Minister Reza Ardaka- With Iraq home an estimated 130 trillion facilities.
nian and Iraqi counterpart Majid Mahdi for cubic feet (3.7 trillion cubic metres) of free and
flows to resume at normal rates. associated gas, there is justified outrage that the
Ardakanian told state news agency IRNA: country continues to flare large volumes of the
“good agreements were reached with the Iraqi resource on a daily basis. Momentum is finally
officials to withdraw Iranian funds from Iraq starting to build behind efforts to develop Iraq’s
to pay for the purchase of the coronavirus vac- gas reserves, through both associated gas cap-
cine from Europe using Iran’s existing financial ture and independent exploration and develop-
resources in Iraq.” This followed the announce- ment through a potential gas licensing round.
ment by Tehran that it had been given the For the time being, though, Baghdad will
go-ahead by American authorities to transfer remain reliant on Iranian supplies with its
$244mn to buy coronavirus vaccines from the downstream and power plans contingent on its
WHO’s COVAX alliance. It also emerged that success in the upstream.™

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