Iraq has awarded a contract to a US company for the installation of a floating terminal which imports liquefied natural gas to power its gas-thirsty electricity plants.
Excelerate Energy, which is based in Texas, said it has received an official award letter from the Iraqi government to develop the terminal.
The facility will enable the importation of LNG to support domestic power generation, help stabilise the national grid and allow Iraq to diversify from unreliable natural gas supply sources, Excelerate said in a statement this week.
Iraq controls the world’s fifth largest proven oil deposits. Its decision followed a sharp decline in Iranian gas supplies, which account for nearly 40 percent of the power generation at Iraq’s gas-run power facilities.
A memorandum of understanding with Turkmenistan to import gas also failed to materialise following US objections, as the gas had to pass through Iran.
Officials said last month the floating terminals would be installed off Basra in southern Iraq, but they did not make clear where the LNG would come from.
Iraqi officials have visited Qatar over the past month for a possible LNG supply agreement while imports from Oman were also discussed during a recent visit to the sultanate by Iraq’s prime minister Mohammed Al-Sudani.
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Officials said the import of LNG is temporary pending the completion of major gas field development projects which Iraq hopes will make it self-sufficient in gas by 2028.
Iraq, Opec’s second largest oil producer after Saudi Arabia, is suffering from a power supply shortage of more than 10 gigawatts because of gas supply disruptions.