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Abu Dhabi, UAEFriday 18 January 2019

US Energy Secretary urges Iraq to cut gas imports from Iran

Rick Perry was visiting Baghdad in an attempt to wean Iraq off Iranian gas

US Energy Secretary Rick Perry speaks at a joint press conference in the Iraqi capital. AFP
US Energy Secretary Rick Perry speaks at a joint press conference in the Iraqi capital. AFP

US Energy Secretary Rick Perry visited Baghdad on Tuesday to urge Iraqi energy officials to reduce reliance on Iranian gas to run its power grid.

Speaking during a visit by the largest-ever US trade delegation to Iraq, the US Energy Secretary said Baghdad should partner with American companies to become energy independent.

Representatives from more than 50 companies from the oil and security sectors were in Iraq for the two-day conference.

"Working together, the US and Iraq can develop Iraq's oil, gas and water industries," Mr Perry told the conference.

"The time has come for Iraq to break its dependence... on less reliable nations seeking domination and control," he said, referring to Iran.

Earlier, Mr Perry said he discussed the US's sanctions on Iran.

"Sanctions were mentioned, they're a reality, they're there," Mr Perry said after meeting Iraq's oil and electricity ministers, without providing further details.

Washington gave Iraq a 45-day waiver over imports of Iranian gas when it reimposed sanctions on Iran on November 5. Iraqi officials have said they need two years to wean themselves off Iranian gas imports and to find an alternative source.

Mr Perry did not say whether Washington would extend the waiver, which runs out next week, but said that Iraq could become energy sufficient.

"This [Iraqi] administration recognises... the imperative to move with some expedition to send a message to the United States... that this is an administration that is going to move with speed to develop infrastructure – especially in the energy sector – that best serves the citizens of Iraq," Mr Perry said.

Most likely [the waiver] will be extended," Harry Istepanian, a senior fellow at the Iraq Energy Institue told The National.

"The Iraqis are clear to the Americans that they cannot just close the valve and stop importing gas from Iran," Mr Istepanian said.

"It is a new government and they cannot just on the first or second month go through this cycle of power shortage."

The country's next most likely gas supplier would be Kuwait, although they would not have enough to supply Iraq. Instead, Iraq would have to import electricity from another neighbour such as Saudi Arabia, Mr Istepanian says.

Iraq could also see a significant investment from the United States to build some of the energy infrastructure necessary to wean itself off Iranian gas.

Iraq reached a deal in October with US energy giant General Electric and German rival Siemens to install liquefied natural gas-operated mobile power units at some small southern oil fields, Al Sabah newspaper reported last month.

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The conference was organised by the US Chamber of Commerce, and as well as Mr Perry, Iraqi Oil Minister Thamer Ghadhban also attended. "The most important [thing] is our presence and our conversations... we talked about the challenges but we also talked about some very positive opportunities," Mr Perry said.

Neither gave details of their meeting.

Washington is seeking to roll back Iranian influence in the Middle East, including in neighbouring Iraq where Tehran has close political and economic ties.

US sanctions on Iran were reimposed after President Donald Trump withdrew from the Iranian nuclear deal in May. Sanctions have targeted Iranian oil as well as its banking and transport industry.

Mr Perry said the United States recognised the challenges faced by Iraq's government in rebuilding oil infrastructure destroyed during the war against ISIS.

Monday marked one year since Iraq announced victory over ISIS, a fight which left large parts of the country in a state of chaos and forced many foreign firms to withdraw.

Since the victory, the US embassy in Baghdad has urged American firms to reinvest in Iraq, and pressured the Iraqi government to open its doors to them.

This week's conference is an opportunity for US firms who left Iraq to see that "Iraq is open for business," said Steve Lutes, vice president of Middle East Affairs at the US Chamber of Commerce.

Mr Perry later met Prime Minister Adel Abdul Mahdi and discussed energy and the economy, the premier's office said in a statement.

Updated: December 12, 2018 02:42 PM

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