Iraq has signed a $450 million investment agreement with US-based Excelerate Energy to construct the country’s first floating storage and regasification unit (FSRU) at the port of Khor al-Zubair, officials told Reuters.

The facility will enable Iraq to import, store, and regasify liquefied natural gas (LNG), which will be integrated into the national power grid to strengthen the country’s energy security. The project’s total investment includes Excelerate’s newest FSRU vessel, currently under construction in South Korea, with a regasification capacity of up to 500 million standard cubic feet per day (mmscf/d).

Under the five-year agreement, which includes extension options, Excelerate will supply the LNG and provide regasification services, with a minimum contracted offtake of 250 mmscf/d.

The agreement comes as Baghdad seeks to attract more US investment and diversify its energy sources. This also aligns with efforts to reduce reliance on Iranian gas imports, which have faced frequent disruption due to US sanctions and payment disputes.

Lately, Iraq has strengthened its energy ties with the United States through a series of agreements aimed at boosting oil production, expanding gas infrastructure, and reducing dependence on Iranian energy imports. US companies such as ExxonMobil, Chevron, Baker Hughes, and Honeywell have been involved in projects ranging from oil field development and gas capture to power generation.