Oil & Gas

Iraq ramps up LNG import projects after US ends Iran waiver

March 10, 2025, 7:57 PM

Ships at dock in Ras Laffan, Qatar. Iraq has sought more LNG from the country as supplies from Iran reduced

Iraq ending Iran LNG purchases
US exemption removed
Seeking alternative sources

Iraq is ramping up development of an offshore liquefied natural gas terminal and a 40km pipeline, as Baghdad seeks to import more LNG following a US decision to end the country’s exemption to restrictions of the purchase of gas from Iran, according to local media.

Ali Shaddad, a member of the parliament’s oil and gas committee, said work on the pipeline to transport gas from an offshore platform to Basra started a month ago and is expected to be completed in 120 days.

Iraq approved a proposal to build a “permanent platform” to import LNG in January 2024.

Building such a facility is costly and takes in general between two to five years.

The LNG terminal is scheduled to be operational in 2026.

In the meantime, Shaddad, quoted by the official Iraqi news agency on Sunday, said a portable offshore terminal would receive gas from a Gulf country to make up for the loss of Iranian supplies.

He did not identify the country, but Iraq has sought to import LNG from Qatar over the past two years following Tehran’s steady decline in gas supplies following a surge in Iranian domestic gas consumption.

Iraq, the second-largest Opec producer after Saudi Arabia, needs oil and gas to operate its power facilities, but it struggles to generate enough electricity as a result of inefficiencies in production and transmission.

The country has the fifth-largest natural gas resource in the Middle East and produces more than 3.1 billion cubic feet per day (cfpd), but it flares 40 to 50 percent of its output because of a lack of infrastructure for gas capture and processing.

Under the US sanctions waiver, Iraq has been able to import around 40 percent of its energy needs from Iran – around 10 gigawatts – although the quantity has fallen below 2 GW in recent months.

However, the Trump administration refused to renew the waiver last Sunday as part of a “maximum pressure” campaign against Tehran.

Iranian gas exports to Iraq of 50 million cubic metres per day came to a standstill in early December because of high domestic demand, caused by a surge in power consumption in the cold season.

Iraq plans to build another offshore LNG terminal in Khor Al-Zubair to decrease dependence on gas from Iran.

It has also accelerated projects to develop its gas resources and awarded more than 20 contracts to international companies.

Last month, Baghdad signed an agreement with UK oil company BP to redevelop four oil and gas fields in the northern Kirkuk region and curb gas flaring.

Another $27 billion project with French major TotalEnergies signed in 2023 aims to add nearly 600 million cfpd of gas to Iraq’s national production by 2028.

US energy technology company Baker Hughes is also working on the development of Nasiriyah and Gharraf fields, set for completion by mid-2026.