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Jordan's first oil shale power plant expected in 7 years

AMMAN - Jordan's switch to power plants operated by oil shale would reduce its energy bill by at least 40-50 per cent, said National Electricity Power Company (NEPCO) officials Wednesday after the government signed a deal with an Estonian firm specialised in the field.

The percentage is calculated against the current prices of oil in the international market, they said.

The Ministry of Energy and Mineral Resources went into the agreement with the Estonian oil shale company "Easti Energy" to build the Kingdom's first power generation plant operating on oil shale extracted through a process called "direct incineration".

Oil shale fuel will replace heavy oil or gas and is expected to be operational in 2015 with a capacity of 600-900 megawatts, NEPCO 's Director General Ahmad Hiasat told The Jordan Times on Wednesday.

Hiasat added that Jordan, in the long-term, can rely on oil shale for the major part of its energy needs, saying that the fuel is the only indigenous energy resource that could reduce Jordan's dependence on imported crude oil and gas and hence ease the pressure on the national economy.

"This is a new start in the country which will bear fruits in the near future," said Hiasat, stressing that imported gas from Egypt will not meet the ministry's expansion plans in the long term.

Jordan, which is a passageway for the Egyptian gas pipeline extending to Syria and other regional countries, buys the fuel at preferential prices under a 15-year deal with Cairo. Many power generation plants have switched to natural gas to cut down on the soaring fuel costs.

Hiasat highlighted that 80 per cent of the country's electricity is being produced using Egyptian gas and 20 per cent is produced by power plants which use heavy oil.

"We have huge reserves of oil shale that are sufficient for hundreds of years," he stressed. When the envisaged oil shale-based plant is operational in seven years, "we have plans to establish other similar facilities", he said.

"This is a big national project and using oil shale means stability and security regarding energy supply," he added.

Director General of the Natural Resources Authority (NRA) Maher Hijazin told The Jordan Times that the production of commercial quantities of crude oil from its oil shale reserves needs 10-12 years.

On Tuesday, an Estonian delegation, headed by the Estonian Economic Affairs and Communications Minister Juhan Parts and the president of Easti Energy Company, handed the government the results of a feasibility study on the Kingdom's oil shale project, Hijazin said.

"The government signed an agreement with Easti to conduct a comprehensive feasibility study on the project on November 11, 2006," he said, adding that the report indicated Jordan will be able to produce not less than 36,000 barrels of oil a day from at least one of its 20 locations rich in oil shale.

He added that the estimated cost of the project, as indicated in the study, stands at $6 billion; however, once an agreement is signed between both sides, the government will not be required to secure any funds as it will only contribute the natural wealth, which some studies estimate at 40 billion barrels.

"After we finish examining the study results, we will start negotiating with the company on various aspects of the project and the government's share," he added, stressing that if this project succeeds, it will be the first of its kind and size in the world.

"The conversion of oil shale into a liquid or gaseous fuel and raw materials will be of decisive importance in attempts to secure the future of energy supplies," he stressed, adding that the economic benefits for Jordan's economy makes the development of oil shale worthwhile.

There are 23 known surface and near-surface deposits, the most important of which are Al Lajjun, Sultani, Jurf Al Darawish, Attarat Um Al Ghudran, Wadi Maghar, Siwaga, Khan Al Zabib and Al Thamad.

By Hani Hazaimeh

© Jordan Times 2008