By John Lee.
Iraq's Council of Ministers has authorized the Ministry of Electricity to contract with the Swiss company Loxstone Energy for the supply of gas from Turkmenistan to Iraq via Iran under a swap agreement.
Due to the importance and urgency of this contract in maintaining the operation of power plants, the deal is exempt from the Government Contracting Instructions, the Federal Budget Law, and the Budget Implementation Guidelines.
The gas supplier is the Turkmen state-owned gas company [Turkmengaz], with whom a memorandum of understanding was previously signed based on Council of Ministers' Decision No. 23519 of 2023.
Cabinet approved adoption of a prepayment mechanism required by the Turkmen gas company, with the Ministry of Finance ensuring the necessary financial allocations are available on time. The government entity will cover taxes and fees.
It also approved exemption from the performance bond, "similar to the Iranian gas contract", with payments made through transfers to the Turkmen gas company and Loxstone Energy, according to the mechanism recommended by the Trade Bank of Iraq (TBI).
The contract will not be subject to the Public Debt Collection Law; it will be governed by Swiss law, and the contract draft will be based on the sole bid received.
(Source: PMO)
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