TEHRAN- Iraq's electricity ministry hopes to resume full imports of Iranian gas after reaching an agreement with Tehran over how to pay its outstanding debts, Argus Media reported.

The news comes just as the temperatures in Iraq have begun to soar.

Iraq's ministers of electricity and finance and the director general of the Trade Bank of Iraq have agreed to schedule the debts so as to resume Iranian gas exports over the coming days, electricity ministry spokesman Ahmed Moussa said.

Gas supplies from Iran were temporarily cut in December over Baghdad's debts of more than $6 billion, and although supplies resumed several weeks after, volumes have been severely restricted since.

Moussa said imports were currently 20mn m³/d, less than a third of the contracted 70mn m³/d Iraq needs to meet its peak summer demand as temperatures rise to more than 50°C.

If full gas imports were to resume, Iraq's electricity generation would reach 22,000 MW, Moussa said. But this is still likely to be well short of peak demand.

Iraq has been importing Iranian gas under two supply agreement signed in 2013 and 2015. Under the first, Iran is committed to export a maximum of 35mn m³/d of pipeline gas to the 3GW Bismaya power plant, Iraq's largest gas-fired plant, which powers the capital. The second calls on Iran to supply southern Iraq with 20-35mn m³/d, with the volumes adjusted depending on the regions' needs.

The country's reliance on gas and electricity imports from Iran also presents political risk as it depends on U.S. sanctions waivers. The U.S. government gave Baghdad a 120-day waiver in March allowing it to continue importing gas and 1,200MW of electricity from Iran.

Last week, during the visit of Iraqi Finance Minister Ali Abdul-Amir Allawi to Iran on top of a high-ranking delegation to hold talks with senior Iranian officials for exploring ways of expanding economic ties between the two neighbors, the two sides discussed Iraq’s energy debts to Iran.

In a meeting of Allawi with Iranian Finance and Economic Affairs Minister Farhad Dejpasand, the two sides negotiated a schedule and ways for repaying Iraq’s energy debts to Iran.

Allawi also met with Iranian Oil Minister Bijan Namdar Zanganeh and Energy Minister Reza Ardakanian on the same day to discuss settling his country’s natural gas dues in detail with the Iranian ministers.

In this meeting, Zanganeh noted that Iran is ready to even boost its natural gas exports to Iraq and expressed hope that the Iraqi government would settle its dues to Iran soon.