News - Middle East: Iraq has reached new agreements with Iran on the supply of natural gas from the country, according to the spokesman of the country’s Ministry of Electricity.

Ahmad Musa al-Ebadi said Sunday that Iran had agreed to increase supply of gas to Iraq to around 30 million cubic meters (mcm) per day as part of a new consensus reached between the two countries.

Al-Ebadi told the Assabah newspaper that Iraq had provided guarantees to Iran that it will pay its arrears on previous imports of energy in installments over the next three years.

Iran slashed the supply of gas to Iraq to below 10 mcm per day in late 2020 after the National Iranian Gas Company said Baghdad was in more than $5 billion of energy arrears.

That comes as gas exports to Iraq had reached records of more than 50 mcm per day in recent years.

Al-Ebadi said that the new gas supply volume agreed with Iran in discussions in Tehran last month would not be enough to meet the growing demand for natural gas in Iraqi power plants over the summer.

However, he said that the Iraqi electricity sector had faced serious challenges last year when Iran cut gas supplies to levels as low as 5 mcm per day.

Iraq, a major crude oil producer, relies on Iran for a major part of the natural gas it needs in power plants in east and north of the country.

Baghdad has secured rounds of waivers from US sanctions on Tehran to be able to continue to import natural gas from Iran.