Washington is concerned about a $14.8 billion gas deal, which was signed by Iran and Iraq on Sunday, according to which Iran will supply Iraq with natural gas for four years.
The deal offers Tehran a respite from sanctions and Iraq a needed energy source, and has already prompted concerns in Washington.

The deal would double Iran's natural-gas exports and require expanded production from a gas field whose development has been hindered by international sanctions, according to a senior Iranian oil and gas official.

According to the deal, Iran would pump 25 million cubic meters of natural gas per day to the Iraqi power plants.

Based on the agreement, Iran would earn $3.7 billion a year from natural gas exports to Iraq.

The U.S. has asked the Iraqi government about the deal, a U.S. State Department spokeswoman said Monday.

Baghdad "has been receptive to these discussions in the past and has expressed its desire to remain compliant with U.S. sanctions," she said. "We would, of course, make clear the implications were any activity to be deemed as at variance with U.S. sanctions."

For Iraq, the natural-gas supplies from Iran would offer a needed fuel source, helping ease electricity shortages by feeding two power plants in a suburb of Baghdad, said Mussab al-Mudaris, a spokesman for the Iraqi ministry of electricity.

For Iran, the Iraq deal would create an important regional export market as Western sanctions aims to pressure Tehran over its nuclear program.

The Obama administration has been increasingly concerned about Baghdad's relations with Iran, senior U.S. officials said.

Iran exported around 800 million cubic feet of gas a day in 2012, mostly to Turkey, according to the BP Statistical Review of World Energy. More than 97 percent of the country's production was consumed domestically, the data showed.

The deal with Iraq would double Iran's natural-gas exports. To do so, Iran would increase production from the giant South Pars field in the Persian Gulf, the senior Iranian official said.

By Al Bawaba

 

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