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Iran Press TV

Iraq pays back $1.6bn of its natural gas arrears to Iran: Owji

Iran Press TV

Thursday, 16 June 2022 5:20 PM

Iran has received from Iraq a sum of $1.6 billion the Arab country owed to Iran for imports of natural gas in the past years, according to remarks by the Iranian Oil Minister Javad Owji.

Owji said on Thursday that the new payment by Iraq is related to an outstanding debt for natural has imports that had taken place before the current Iranian administration came to office in August.

He said that Iraq has settled all payments related to supplies it has received from the National Iranian Gas Company (NIGC) since the summer of last year.

"This figure of $1.6 billion had not been anticipated in their 2022 budget but they got an approval from their parliament and paid the sum to the NIGC account," Owji said during a live broadcast by the IRIB News.

The minister said the payment will allow Iran to increase its supply of natural gas to Iraq over the summer months when the Arab country is expected to face a record demand for energy in its power plants.

The NIGC slashed its supply of natural gas to Iraq in late 2022 after it announced the Arab country had been in more than $5 billion worth of arrears for its previous imports.

NIGC's current supply to Iraq is believed to be less than 10 million cubic meters (mcm) per day, down from records of nearly 50 mcm per day reported several years ago.

Iraqi officials said last month that they had reached a new understanding with Iran by which the gas supply could reach 30 mcm per day over summer months.

That came after a senior political and banking delegation from Iraq came to Tehran in early May to discuss the arrears issue.

Iraq has secured special waivers from US sanctions on Iran to be able to import natural gas and electricity from its eastern neighbor.

However, the sanctions, which also target Iran's banking relations with the rest of the world, have made it difficult for Baghdad to pay for its energy imports from Iran.

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