Iraq exploring floating gas terminals to meet power demand

(Bloomberg) – Iraq is in talks with several companies to secure two floating storage regasification units by early June, as OPEC’s second-biggest producer tries to address power shortages caused by a U.S. move against Iran.

The U.S. decided earlier in March not to renew a waiver that allowed Iraq to buy electricity from Iran, with Donald Trump’s administration pressuring Tehran into negotiating a new nuclear deal. The decision has left the Iraqi government in need of more gas to meet its growing demand for electricity.

The FSRUs, which will hold liquefied natural gas to convert to gas, will be installed near Khor al-Zubair Gulf port in Basra, Iraqi Oil Minister Hayyan Abdul Ghani said in an interview with the Iraqi state-run TV on Sunday.

Iraq relies on its domestic gas production for around 60% of its needs. Imports cover the remaining 40% “but during peak time this percentage increases to reach 50%,” the minister said.

The Iraqi government has also launched a tender for a fixed regasification platform in the Grand Faw port in the south. 

Iraq has been seeking to cut the amount of gas it burns off unproductively in order to reduce imports amid rising demand, aiming to completely stop gas flaring by the end of 2028.

Meanwhile, talks between Iraq and oil companies operating in the country’s semi-autonomous Kurdistan have reached “advanced stages,” according to Abdul Ghani. The minister said he hopes exports from the northern region will resume in a week.

While Iraq has repeatedly announced progress for the restart of the northern export pipeline, the group representing oil producers in the country’s north have said they needed more clarity on compensation and that the contracts to resume exports aren’t yet in place. 

Iraq has pledged the country will remain within its overall OPEC+ quota after the restart of the crude export pipeline but hasn’t clarified how it will achieve that.