Shafaq News/ The Iraqi government decided, on Tuesday, to adopt a prepayment mechanism for importing Turkmen gas through Iranian territory.
The Iraqi Council of Ministers' media office stated that the council has granted the Ministry of Electricity the necessary powers to contract with Loxstone Energy to supply Turkmen gas to Iraq via Iran through a swap mechanism.
The statement clarified that the contract will be exempt from the regulations governing public contracts and the federal budget for the next three years, as well as the instructions facilitating the budget law. “This is due to the importance and urgency of the contract, which is crucial to ensuring the continuous operation of power plants. The supplier of the gas is a government entity, represented by the Turkmen Gas Company, with whom a memorandum of understanding was signed as per Council of Ministers Decision No. 23519 of 2023.”
It further explained that “the prepayment mechanism requested by the Turkmen Gas Company will be adopted, and the Ministry of Finance will secure the necessary financial allocations on time. The government entity will bear the taxes and fees associated with the agreement.”
Additionally, the council noted that the contract will be exempt from performance bonds, similar to the contract for Iranian gas. Payments will be made through transfers to both the Turkmen Gas Company and Loxstone Energy, following the mechanism recommended by the Trade Bank of Iraq. The contract will not be subject to the Law on Government Debt Collection.
Moreover, the contract will be governed by Swiss law, and its draft will be based on the sole offer received.
The council also approved principles of cooperation on energy between the Iraqi Ministry of Electricity and Stellar Energy America Inc., without entering into any financial commitment.