Saudi government ratifies an MoU on power interconnection with Iraq

Shafaq News/ The government of Saudi Arabia has ratified a memorandum of understanding (MoU) on power interconnection project with Iraq, the Saudi Press Agency (SPA) said on Tuesday.

On January 25, 2022, Saudi Arabia and Iraq signed a memorandum of understanding to connect their electricity grids, as OPEC's two largest oil producers work together to help reduce Baghdad's reliance on Iranian energy imports.

Saudi Arabia, the world's largest crude oil exporter, will aim to "achieve optimal investment" in the electrical connection with Iraq, the kingdom's Energy Minister Prince Abdulaziz bin Salman said during a virtual signing ceremony.

Iraqi Electricity Minister Adel Karim said the link-up would be completed within two years, according to the state-run Iraqi News Agency, though no details of how the grids will be connected nor how much electricity will flow into Iraq were released.

Integrating regional grids has long been on the agenda of various oil producers in the Gulf.

The Gulf Cooperation Council, which comprises the six largely oil-trading countries of the Persian Gulf, have an interconnection authority to ensure the stability of regional grids.

Baghdad, OPEC's second-largest oil producer, and energy-deficient Jordan have been in discussions to join the GCC grid.

Including Baghdad in the regional grid followed a study " that showed that the linkage provided promising opportunities between the two countries," Prince Abdulaziz said.

Iraq is under increasing pressure from the US to wean itself off electricity and gas imports from Iran, which has been subject to US sanctions since 2018. The US has issued Iraq a series of sanctions waivers to continue importing Iranian energy but has warned the waivers could end if Baghdad does not make serious progress toward finding other fuel and power sources.