(Oil price)– Iraq signed on Tuesday a contract with U.S. company Excelerate Energy for the country’s first floating gas platform, the office of the Iraqi Prime Minister said, as OPEC’s second-largest oil producer aims to strengthen its gas supply and energy security.
As part of the agreement, Excelerate Energy will provide a floating storage regasification unit (FSRU) that will be capable of receiving, storing, or regasifying LNG, two Iraqi energy officials with knowledge of the agreement told Reuters.
Iraq, which looks to shake off its dependence on Iranian gas supply for power generation, sent last month the award letter to Texas-based Excelerate Energy for the LNG import infrastructure at the Khor Al-Zubair commodities port near Basra in southern Iraq.
Iraq has long depended on Iran for natural gas and electricity imports. Despite being a major oil producer, Iraq has historically seen high levels of flaring of associated gas instead of capturing it in a gas supply chain. In the summer months, during peak electricity demand, Iraq often suffers from crippling blackouts and frequent outages due to unstable and insufficient supply of gas and power from Iran.
Excelerate Energy has received the official Award Letter from the Government of Iraq to develop an integrated floating LNG import terminal, marking a significant milestone in the country’s energy diversification strategy, the U.S. company said. Final approvals to the deal were given at a meeting between Iraq’s top officials and company representatives on the sidelines of the UN General Assembly in New York at the end of September.
“The proposed terminal will enable the importation of LNG to support domestic power generation, help stabilize the national grid, and allow Iraq to diversify from unreliable natural gas supply sources,” Excelerate Energy said early this month.
Senior Official Thomas Lersten of the U.S. Department of State commented,
“This terminal opportunity demonstrates U.S. energy leadership and represents a vital step in advancing Iraq’s energy security and reducing its reliance on Iranian pipeline gas.”
By Tsvetana Paraskova for Oilprice.com
