Federal Iraq’s gas-fired power plants lack feedstock, while the absence of an existing export route has hamstrung development of the Kurdistan Region’s gas fields. The solution looks simple, and there are proponents for a deal on both sides, but Iraqi politics means it is never so simple.

Endowed with abundant natural gas resources, federal Iraq’s power generation sector nevertheless is a mess. The country’s 15GW of nominally gas fired power stations have to burn...