Taylor HarrisonThe United States is quietly building energy infrastructure in Iraq that could reshape who controls the country's fuel supply and, by extension, its politics for decades to come. Excelerate Energy, a Texas based company, announced last week that a new liquefied natural gas import terminal at the Port of Khor Al Zubair will begin operations in the second quarter of 2027.
A Modest Announcement With Outsized Stakes
On paper, the news looked routine: a start date for an LNG import terminal in southern Iraq. But the details point to something far bigger than a single infrastructure project. This will be Iraq's first ever LNG import terminal, and Excelerate Energy is not just a contractor. The company is the world's leading operator of floating storage and regasification units, along with the broader infrastructure that supports them.
Excelerate signed a fully integrated agreement with Iraq's Ministry of Electricity carrying an initial budget of 450 million dollars. A senior figure close to Iraq's Oil Ministry, speaking exclusively about the arrangement, described that figure as simply a starting point rather than a ceiling. Excelerate will serve as the sole commercial developer of the floating LNG infrastructure, handling engineering, dredging, site clearance, berth upgrades and jetty reinforcement. It will also supply the LNG cargo itself, folding fuel delivery and physical infrastructure into one contract.
The terminal is designed to handle a guaranteed regasification capacity of 500 million standard cubic feet per day, with Iraq committing to take at least 250 million cubic feet daily. Under international law, foreign oil and gas firms operating such projects are permitted to bring in security personnel and related protective infrastructure, so long as the host government signs off.
Why Iraq, Not Just Iran, Has Washington's Attention
Iran has dominated headlines since Operation Epic Fury began on February 28, but Iraq has quietly remained Washington's central concern in the region since Saddam Hussein's fall in 2003. Since Iran's 1979 Islamic Revolution, the United States has viewed Iraq as functioning in many ways as a client state of Tehran, tied together through economic, political, military and religious channels.
Washington also sees southern Iraq, like Iran itself, as falling under Beijing's economic orbit. That dynamic traces back to the Iran China 25 Year Comprehensive Cooperation Agreement, which gave China steep discounts on Iranian oil and gas, first pick of fields to explore (with Russia getting second choice), and rights to build out extensive infrastructure, including projects with military applications. Iraq saw a similar pattern unfold, starting with the 2019 Oil for Reconstruction and Investment agreement and growing into the 2021 Iraq China Framework Agreement.
This closeness between Baghdad and Tehran has done more than cement alliances. It has helped Iran survive decades of international sanctions by allowing sanctioned Iranian oil to move under the cover of non sanctioned Iraqi barrels, a task made easier because several major oil fields straddle the border and share the same underground reservoirs. For China, the twin agreements with Iran and Iraq have translated into leverage over two of the region's most critical energy corridors: the Strait of Hormuz, through which up to 30 percent of the world's oil and 20 percent of its LNG have historically passed, and the Bab el Mandeb Strait, which has carried as much as 12 percent of global seaborne oil trade and roughly 8 percent of LNG shipments.
Quietly Building Energy Leverage to Undercut Tehran and Beijing
Washington has long looked for ways to reverse this arrangement: loosen the bond between Baghdad and Tehran, position the U.S. as Iraq's primary partner in place of Iran and China, and eventually help steer Iran itself toward a more Western leaning government. Since over 90 percent of Iraq's government revenue comes from oil and gas, and since LNG has become the world's go to emergency fuel source following Russia's invasion of Ukraine on February 24, 2022, building a major LNG hub inside Iraq gives the U.S. a concrete lever to pull.
Alongside the energy push, Washington is also working to expand the Abraham Accords, the normalization agreements between Arab states and Israel that it has brokered, viewing Iraq as a potential anchor point. That effort doubles as a counter to China's Belt and Road ambitions across the Middle East.
America's LNG Edge Over a Damaged Qatar
The timing favors Washington. Iran inflicted infrastructure damage on regional LNG suppliers, and officials in Qatar, long one of the world's top LNG exporters, now estimate it will take three to five years to fully repair the North Dome gas facilities in Ras Laffan Industrial City. That delay carries real consequences for Doha's export capacity in the interim.
| Metric | Figure |
|---|---|
| Current U.S. natural gas processed into LNG | About 18 Bcf per day |
| Projected U.S. LNG export capacity growth | Expected to double by 2031 versus 2024 levels |
| Qatar's North Dome repair timeline | 3 to 5 years |
| Iraq terminal guaranteed regasification capacity | 500 MMscf/d |
| Iraq's committed minimum daily take | 250 MMscf/d |
By the end of 2022, the U.S. had already established itself as the world's leading LNG exporter, and the Energy Information Administration projects that its export capacity will double by 2031 compared with 2024 levels. A senior energy security source at the European Commission put the strategic logic bluntly: controlling energy supply is how Washington expects to shape outcomes elsewhere. The source pointed to Trump's advice to Europeans during the closure of the Strait of Hormuz, when he suggested they simply buy their energy from the United States instead.
