Iraq is currently negotiating a liquefied natural gas (LNG) deal with Algeria, which is expected to be finalized by next summer. The agreement aims to support Iraq’s electricity sector, with exports set to begin once the necessary infrastructure is in place. The deal is expected to be publicly announced within the next two months.
To facilitate LNG imports, Iraq is developing the required infrastructure at the Khor Al-Zubair port in the southern province of Basra, with construction anticipated to take around four months. The deal is expected to involve annual volumes of one million tons of LNG, although the exact amount is still under negotiation.
This deal is seen as an important step for Iraq, which has been reliant on gas imports from Iran to meet the energy needs of its power plants. However, with Iran’s gas supplies now suspended due to tighter U.S. sanctions, Iraq is looking to diversify its sources of energy. In addition to Algeria, Iraq signed a deal with Turkmenistan last October for up to 20 million cubic meters of gas per day, which is expected to cover half of the country’s power plant needs.
The Iraqi government is also investing in domestic gas production projects to reduce dependency on foreign suppliers. With gas-fired power plants accounting for approximately 60% of Iraq’s electricity generation, securing reliable gas supplies is critical for ensuring energy stability, especially as Iraq works to strengthen its energy security amid changing geopolitical dynamics.