Difficulties arranging the letters of credit (L/Cs) needed for Iranian gas exports to start flowing to Iraq have been overcome.

Iran has now started piping gas to its neighbour after many years of sensitive negotiations over price and other issues.

L/C difficulties

Difficulties obtaining appropriate L/Cs emerged in January, when the Iranian deputy oil minister, Amir Hossein Zamaninia, alluded to the problem (DC World News, 23 January 2017).

He said then that the main issue yet to be resolved was "the method of opening revolving L/Cs".

Ramping up

Zamaninia has now announced that Iran is exporting natural gas to Iraq in a deal that will earn the Islamic Republic a reported US$3.7 billion per year.

The deputy minister added that Iran will initially pipe approximately 7 million cubic metres (mcm) per day to Iraq and plans to ramp this volume up to 35 mcm daily.

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