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Jordan to import liquefied gas by 2014

By Taylor Luck AMMAN -- Jordan plans to begin importing liquefied natural gas (LNG) by 2014 in a bid to alleviate the country's ongoing energy woes, according to energy officials.

In a press conference on Saturday, Minister of Energy and Mineral Resources Alaa Batayneh confirmed that the Kingdom had committed to building a liquefied gas terminal at the Red Sea Port of Aqaba by 2014, with a tender for the multimillion-dollar project to be floated this fall.

The move comes after months of deliberations over potential alternatives to Egyptian gas, which has long been the Kingdom's main energy source but has yet to return to full levels since a series of acts of sabotage began periodically cutting the supply in February 2011.

Egyptian gas supplies currently stand at less than 10 per cent of their 300 million cubic foot capacity -- a deficit that costs the Kingdom some JD5 million per day

According to an energy ministry source, who declined to be named, decision makers' preferred option was an expedited expansion of the Risheh natural gas fields in the northeastern desert, viewed by officials as a "more reliable" and less costly alternative to a transition to liquefied gas.

The government, however, eventually decided to push through with its LNG plans after it was determined that British Petroleum would be unable to complete the project -- which experts hope will expand the field's production to up to one billion cubic feet per day -- ahead of schedule.

Although Jordan has yet to reach a deal with an LNG provider, Qatar has emerged as a leading candidate, the source said, particularly after a recent round of "positive" advanced talks held in the capital last week.

According to the source, the final outstanding issue in discussions between Amman and Doha is the price, which is expected to be closer to international rates than the preferred prices at which Egypt previously sold the Kingdom gas.

A Qatari firm is also under consideration for the construction of the liquefied gas terminal.

Despite meeting Jordan's near-term energy needs, officials admit that the measure fails to wean the country off energy imports, which cost the Kingdom some 25 per cent of its gross domestic product annually. High international oil prices have pushed the National Electric Power Company 's (NEPCO) budget deficit to JD1.7 billion, forcing officials to increase electricity rates earlier this month.

The recent rise in rates is expected to shave some JD100 million from NEPCO's budget deficit, which officials aim to close within the next 11 years.

© Jordan Times 2012

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