Germany is engaging in bilateral talks with Iraq over potential gas imports to help Berlin diversify its energy sources, Chancellor Olaf Scholz said on Friday, January 13, 2023, the Middle East Eye reported.

The latest meeting between the German chancellor and the Iraqi government is among the recent bilateral talks between Berlin and other countries, including the US, UAE, and Qatar, to secure alternative gas supplies following Moscow’s invasion of Ukraine.

"We also talked about possible gas deliveries to Germany and agreed to stay in close contact," Scholz said in a joint presser with Iraqi Prime Minister Mohammed Shia al-Sudani in Berlin.

Iraq relies on Iran for at least 40% of its energy supplies, with gas supplies constituting a greater chunk of the imports despite holding the 12th largest gas reserves in the world due to a lack of investments in facilities to capture and process the gas into commercial fuel for domestic use and exports.

According to the Iraqi government, the country flares most of the gas produced during oil extraction, which could otherwise have been processed and put to valuable use.

“We are striving for a better use of flared gas, and correspondingly we can use gas much better and more efficiently,” Sudani said.

“We offered during today’s visit that German companies can invest in these areas and be present in Iraq.”

To reverse the current situation, the Iraqi leader affirmed that his country offers opportunities to German companies to invest in the Iraqi gas industry to process the natural gas and gas generated as byproducts of oil production into commercial gas, which could be exported to fill the gas supply deficit in Germany as Berlin looks to wean off the weaponized Russian gas.

Over the past years, Iraq's semi-autonomous Kurdistan Regional Government (KRG) has been working to extend a gas pipeline network towards the border with Turkey for prospective export to Europe. However, the progress has been stalled due to the political instability in the Kurdish region.

Following Friday’s top-level bilateral meeting, Siemens Energy, a German energy giant, signed a contract with Iraq to upgrade the country’s power grid as the country faces frequent blackouts.