Iran begins sending gas to Iraq under major deal

Tehran,: Iran has begun exporting gas through a pipeline to Baghdad under a deal set to make Iraq the Islamic republic's top customer, the oil ministry said.

"Iran's natural gas exports to Baghdad began yesterday evening," Deputy Oil Minister Amir Hossein Zamaninia said late yesterday in comments carried by the ministry's Shana website.

"The exports have started with a volume of seven million cubic metres a day and will eventually reach 35 million cubic metres," he said.

The announcement came two days after Iraqi Prime Minister Haider al-Abadi visited Iran following a fence-mending trip to its bitter rival Saudi Arabia amid diplomatic turmoil in the Gulf.

A new pipeline links western Iran to Baghdad, while a second in Iran's southwest will pump Iranian gas to the southern Iraqi city of Basra.

Once the Basra pipe comes online, Iraq's total gas imports from Iran are set to reach up to 70 million cubic metres a day.

Iran sits on the world's second largest natural gas reserves and produces some 600 million cubic metres a day.

But despite almost doubling its oil exports since international sanctions were lifted under a 2015 nuclear deal, it consumes most of its gas domestically - partly for lack of export infrastructure.

Turkey has so far been its only export client, importing some 30 million cubic metres a day under a 1996 deal.

The Islamic republic, seeking to expand its gas market, is developing production facilities in the huge offshore oil and gas field of South Pars, which it shares with Qatar.

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