Iran signs deal doubling gas exports to Iraq

Iranian Oil Minister Bijan Namdar Zanganeh (C), Iraq's Deputy Energy Minister Khaled Hassan Saleh (L) and Iranian Deputy Oil Minister Hamid Reza Araqi during a press conference in Tehran on November 11, 2015 (AFP Photo/Atta Kenare) (AFP)

Tehran (AFP) - Iran will double gas exports to neighbouring ally Iraq from 2017 under a contract signed on Wednesday.

The deal, to send 20 to 35 million cubic metres of gas per day to the southern Iraqi city of Basra, follows a first major contract between the countries in 2013 to export gas to the Iraqi capital Baghdad.

"The gas export will begin in a year and a half with new pipelines and facilities," Iran's Deputy Oil Minister Hamid Reza Araghi said, before signing the contract with Iraq's deputy energy minister.

The contract is for six years, he added, without mentioning its total value.

"The pricing will be similar to that of the Baghdad contract," Araghi said.

Local media had earlier reported that the Baghdad contract, to export 25 million cubic metres of gas a day, was worth $3.7 billion (3.4 billion euros) a year.

Iran sits on the world's second largest natural gas reserves and produces some 600 million cubic metres a day, almost all of which is consumed domestically due to lack of exports means.

Shiite powerhouse Iran and Iraq, which fought a war in the 1980s, have become close allies since the 2003 fall of Saddam Hussein and the rise to power of a Shiite-dominated government in Baghdad.