The newly-appointed CEO of the National Iranian Gas Company (NIGC) says Tehran is ready to extend a natural gas export contract with neighboring Iraq despite massive arrears owed by Baghdad for previous imports.
Majid Chegeni said on Monday that Iran places a huge significance on strategic ties with Iraq which covers areas of culture and religion along with the economic interests of the two nations.
“The more our cooperation increases, especially in the field of energy, the deeper and more objective these ties would become,” said Chegeni while meeting a senior delegation from the Iraqi electricity ministry in Tehran.
The comments came after Iran’s Oil Minister Javad Owji and Iraq’s Minister of Electricity Adel Karim met in Tehran on September 25 to discuss issues related to the reduced Iranian gas supplies to Iraq.
Iran started to slash supplies to Iraq since last summer when the NIGC announced that the Iraqis had been $6 billion in arrears for previous imports.
The NIGC has said in later statements that half of the debt has been paid by the Iraqi government into an account in the Trade Bank of Iraq while no action has been taken on the rest of the arrears as well as on the transfer of the funds to Iran.
Iraqi authorities insist US sanctions on Iran has caused the arrears to pile up while effectively preventing any payments be made from the Iraqi side.
In his Wednesday meeting with Iraqi electricity ministry officials, Chegeni said that Iran would be ready to consider Iraq’s new proposals for extending the gas supply contract.
He said, however, that Iran expects the Iraqi side to commit to the current and previous agreements on the issue between the two countries.
Iraq relies on Iranian gas and electricity supplies for nearly a fourth of its total power demand. Cities in the country have been facing power cuts since Iran reduced its supply of gas to the Iraqi electricity stations to nearly 8 million cubic meters (mcm) per day from highs of around 50 mcm recorded last year.