Iraq is considering linking up to a gas pipeline running from Egypt through other Arab states as a way to export its gas, Iraqi Prime Minister Nuri al-Maliki said today after meeting the Egyptian President Hosni Mubarak.

Iraq, the world’s 10th largest holder of gas reserves, wants to join top energy producers by tapping its oil and gas riches but foreign bidders face tough terms and shaky security in a country still fighting to tame an Islamist insurgency.

Maliki said his discussions with Mubarak included “the issue of Iraqi gas that could be linked with the Arab gas pipeline that comes out of Egypt to the rest of the Arab states.”

The Arab Gas Pipeline is aimed at supplying customers in Jordan, Syria, Lebanon and Turkey, and potentially Europe through Egypt, the world’s 15th biggest holder of natural gas.

Iraq auctioned off three major natural gas fields today to international companies, part of its strategy to shake off a legacy of war and isolation by opening up the lucrative sector.

Speaking in Cairo, Maliki said talks also covered potential economic deals between Iraq and Egypt which included a free market between Iraq and Egypt and the transport of goods between the two states via Jordan.

Maliki met Mubarak and other government officials in Cairo, the latest in a round of trips to the region that included Iran, Syria and Jordan.

Political analysts said the trips aimed to gain Maliki regional backing for his bid to stay in power by offering business opportunities in Iraq’s war-damaged economy.

“Our goal is to form a strong and cohesive government that represents the full spectrum of the Iraqi people … God willing this government will come out to light soon,” Maliki said.

The lack of a new government seven months after an inconclusive election has sparked concerns of a spike in violence just as the sectarian slaughter triggered after the 2003 US-led invasion recedes and US forces start to withdraw.

Maliki, a Shi’ite, has won crucial support from Iran-backed, anti-US Shi’ite cleric Moqtada al-Sadr, but remains at odds with some Shi’ite groups and the secular, Sunni-backed Iraqiya bloc that won the most votes.

(Source: upstreamonline)