ERBIL, Kurdistan Region of Iraq - Iraqi Prime Minister Mohammed Shia’ al-Sudani on Tuesday oversaw the signing of a contract between the Iraqi electricity ministry and the US-based Excelerate Energy to implement a floating gas terminal project, with the initiative being hailed by the US Embassy in Baghdad as a "decisive step" toward Iraq achieving energy independence from Iran.

Beforehand, Sudani received US Deputy Secretary of Energy James Danley and his accompanying delegation, with the US Embassy in Baghdad's Charge d'Affaires Joshua Harris also in attendance. 

During the meeting, the premier said Baghdad has set 2028 as a deadline to reach self-sufficiency in gas production and stressed the importance of his country cooperating with US companies in the oil and energy sectors.

Later the same day, he oversaw a contract signing ceremony for a floating gas terminal with "a daily capacity of 15 million cubic meters" for a renewable five-year term, the premier's office said in a statement.

A floating gas terminal is a ship- or barge-based facility that produces, liquefies, and stores gas from offshore fields.

"The floating platform represents a flexible option in terms of implementation and related infrastructure, offering a quick solution to gas-related issues, as it can be executed in record time and at a lower cost compared to fixed platforms," the statement continued. "This aims to supply natural gas to power generation plants, support electricity production by diversifying gas sources to meet the actual operational needs of the plants."

"The proposed terminal will enable the importation of LNG [liquified natural gas] to support domestic power generation, help stabilize the national grid, and allow Iraq to diversify from unreliable natural gas supply sources," Excelerate Energy said earlier this month, announcing the project’s approval.

The US Embassy in Baghdad hailed the project as "a decisive step toward achieving Iraq's energy independence from Iran," with the latter country's influence in Iraq long having been a bugbear of US foreign policy in the region.

Iranian gas supplies accounted for between 30 and 40 percent of Iraq’s energy needs, with Baghdad coming under heavy pressure from Washington to diversify its gas imports. 

Previous US administrations have repeatedly renewed a waiver permitting Iraq to purchase Iranian electricity, as the country continues to struggle with providing power to its people.

A National Security Presidential Memorandum by US President Donald Trump to impose further sanctions on Iran in early February said that the Secretary of State shall "modify or rescind sanctions waivers, particularly those that provide Iran any degree of economic or financial relief," ultimately ending the waiver.

Iraq plans to generate 12,000 megawatts from renewable sources by 2030, aiming to ease pressure on the national grid. On peak summer days, demand may reach 55,000 megawatts while supply remains around 28 megawatts, showing the urgent need for new solutions.