Two new LNG terminals in Iraq to replace Iran gas

Qatar Energy

• Iran gas unreliable
• New terminals in south
• Qatar likely supplier

Iraq is planning to build two offshore liquefied natural gas (LNG) terminals to tackle a persistent electricity supply shortage, its oil minister said on Monday.

One facility to receive imported LNG needed to run its power stations will be located in the Faw port under construction in southern Iraq.

The other will be at the Khor Al-Zubair port near the southern oil-hub of Basra, the minister said.

In a meeting of the Iraq-UK Business Council in Baghdad oil minister Hayan Abdel Ghani confirmed that the ministry had endorsed the construction of an offshore LNG platform in Faw port to import gas.

“This project will ensure sufficient gas quantities for the operation of power facilities in South Iraq,” he said.

“We are also ready to build another offshore terminal in Khor Al-Zubair. We have invited companies which have expressed interest in the project to bid within one month.”

Ghani did not specify the source of LNG imports but observers believe Iraq, Opec’s second-biggest oil producer, could revive its bid to take gas from Qatar. 

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Earlier this month Iraq said it would stop taking natural gas from neighbouring Iran by 2028 because persistent supply disruptions were undermining its electricity generating capabilities.

Iraq held negotiations for several weeks with Qatari officials in 2022 for the possible purchase of LNG as part of a drive to diversify its supply sources.

The talks produced no results after Iran, Iraq’s sole foreign gas supplier, increased gas quantities in an apparent bid to undercut Qatar’s attempts to supply it.

Walid Khaddouri, former information director of the Kuwaiti Arab Energy Organisation, said: “Building two offshore LNG terminals is costly, but Iraq seems in a hurry to offset stalled gas supplies from Iraq.”

Iraqi officials have said the loss of Iranian gas, together with maintenance work on some of its domestic power facilities, cut Iraq’s electricity production by nearly 10 gigawatts.

Nabil Al-Marsoumi, economy professor at Iraq’s Basra University, said: “One good option for Iraq is to import LNG from Qatar.”

Iraq has also accelerated projects to develop its own gas resources with the award of more than 20 contracts to international companies.

Abdel Ghani said Iraq possesses nearly 130 trillion cubic feet of natural gas reserves, which have remained largely untapped because of a lack of investment.