AMMAN -- A dawn blast in Egypt's Sinai Peninsula dealt Jordan's energy sector its latest setback on Sunday prompting officials to prepare for yet another prolonged period without Egyptian gas supplies.
According to Egyptian state media, civil defence teams have contained a fire following twin explosions on the Arab Gas Pipeline near the city of Al Arish early Sunday morning. The blasts marked the twelfth act of sabotage on the pipeline in less than a year.
According to sources at GASCO -- the Egyptian firm that oversees the gas pipeline -- technical teams have yet to determine the extent of the damage caused by the blasts, which based on previous attacks may require "weeks" to repair.
Minister of Energy and Mineral Resources Qutaiba Abu Qura confirmed that the blast completely severed gas supplies, which have yet to surpass experimental levels since the previous act of sabotage on the pipeline in late November.
According to Abu Qura, the attack will lead to yet another delay in the return of Egyptian gas supplies, upon which Jordan relies for 80 per cent of its electricity generation needs, describing the blast as a "setback" to the entire energy sector.
"This will definitely have a negative impact on Jordan," Abu Qura told The Jordan Times.
Meanwhile, officials say the blast will have a "limited short-term impact" on Jordan's electricity sector, which has been relying on costlier heavy oil and diesel fuel since November's attack.
"In the short to medium term this will not affect our ability to continue electricity generation, but we are holding out hope that gas supplies return as soon as possible," National Electric Power Company (NEPCO) Director Ghaleb Maabreh told The Jordan Times.
The explosion comes within days of the announcement of new electricity tariffs designed to address the impact of the growing unreliability of Egyptian gas supplies, which cost the Kingdom an additional JD1 billion in 2011 -- a number that is projected to reach JD1.7 billion this year.
The series of attacks on the Arab Gas Pipeline led to a decline in gas supplies from an average of 200 million cubic feet per day to an average of 80 million cubic feet in 2011, well short of the 370 million cubic feet required to sustain electricity generation in the Kingdom at affordable cost.
The ongoing disruptions in supplies have forced the Kingdom's power plants onto costlier heavy fuel oil and diesel reserves, pushing NEPCO's electricity generation costs to 197 fils per kilowatt hour -- nearly three times the rate it sells electricity to the majority of households.
The government unveiled on Thursday new electricity tariffs raising prices by an average of 9 per cent based on a gradual scale officials say is designed to ensure excess users carry the burden of increased costs.
Abu Qura refused to rule out the possibility of future rises in electricity prices should the Kingdom witness prolonged cuts in gas supplies.
"Raising electricity prices is not a question of desire; it is a question of necessity and we are doing everything in our power to avoid this scenario," Abu Qura said.
With growing doubts in Amman over the ability of Cairo to secure the 400-kilometre Arab Gas Pipeline, Abu Qura said the ministry is accelerating efforts to identify alternative energy markets, including the import of liquid gas from Qatar and natural gas from Iraq.
According to Abu Qura, Jordanian officials are taking a series of measures, with a joint Qatari-Jordanian technical team expected to unveil its recommendations regarding the feasibility of importing Qatari gas next month, all with the main target of weaning the country off Egyptian gas "as soon as possible".
"Once we secure a continuous, reliable supply of gas from Qatar or another country we can take a decision ending our reliance on Egyptian gas," Abu Qura said.
"But until that moment comes we must continue living day-to-day and hoping that gas supplies become stable."
Despite the push for alternative energy sources, officials admit that it will take up to two years before Jordan benefits from any new energy agreement due to infrastructure requirements.
Industry experts say the ongoing Egyptian gas crisis has elevated energy independence from a policy matter to an issue of national security for Jordan, which imports 98 per cent of its energy needs at a cost of one-fifth of the gross domestic product.
© Jordan Times 2012
