Iraq is looking to join the LNG importers’ club, as it faces uncertainty over Iranian pipeline gas supplies, which could result in electricity shortages.
The country was said to be in talks to secure a vessel to use as an FLNG import terminal, according to a Bloomberg report.
A plan is being discussed with an undisclosed UAE-based firm to import LNG and procure the floating terminal, Hamza Abdul Baqi, Director General of Iraq’s South Gas Co, confirmed in an interview last week.
Iraq’s first foray into buying LNG comes as the US ended a sanction waiver for electricity imports from Iran, as part of President Donald Trump’s plan to put pressure on Tehran.
However, to contract a floating import unit before demand rises in the summer could be difficult, as the units normally take over a year to deploy and their availability is currently scarce.
Iranian power purchases make up a small share of Iraq’s total electricity consumption. Yet Iraq is dependent on Iranian gas to run its generating plants. But supplies have been haphazard, due to technical and payment issues.
The US move also complicates gas purchases from Iran, and a decline would likely result in more blackouts during the very hot summer.
Pipeline flows had already stopped to power plants in Baghdad and the central Euphrates region for the past two months, electricity ministry spokesman Ahmed Moussa told Iraq news agency INA early last week.
Supply to power plants in southern Iraq has also been unstable, he added.
Iraq has been working on plans to secure fuel from other sources, including the mooring of FSRUs at its ports to import as much as 500 mill standard cu ft per day of LNG.
The country had said it expected to make this operational before this summer.
An FLNG import terminal, once installed, could make up about 50% of the gas that Iraq’s was receiving from Iran, Abdul Baqi added.
However, FSRUs can take more than a year to install and the rapid deployment of several units in Europe, primarily Germany, after the 2022 Russian invasion of Ukraine, took months to become operational, which has caused a unit shortage.
