Jordan Looks to Benefits of Oil Shale Projects
In a press release dated 12 June 2013, Enefit Jordan announced it has received approval from the Ministry of Environment to proceed with its oil shale fired power plant in Jordan. The approval was given following a review by a committee appointed by the ministry of a detailed third party Environmental Impact Assessment (EIA) submitted by Enefit. Andres Anijalg, Project Director for Enefit Jordan, stated ‘We are now one step closer to making this project a reality and leveraging Jordan’s abundant oil shale resources to overcome the energy challenges the Kingdom is facing.’
The power plant will supply the people of the Hashemite Kingdom with electricity by 2017. It will have a capacity of approximately 500MW enough to cover 20% of the country’s energy needs and is expected to reduce the Kingdom’s expenditure on the import of oil products for power generation by more than 350 million Jordanian Dinars a year. The project will also create thousands of jobs and provide a wide range of economic benefits for the Kingdom. With access to cheaper energy, the Kingdom will reduce its imports of expensive fuel products and see its country’s trade balance improved.
Jordan previously relied on Egyptian gas
Jordan previously relied on its Egyptian neighbour to satisfy its domestic energy needs. The Arab Gas Pipeline, a trans-regional 1,200 km gas export pipeline built to carry natural gas from Egypt to Jordan, Syria and Lebanon, transported a total of approximately 3 billion cubic meters of Egyptian gas to Jordan satisfying 80% of Jordan’s domestic needs. The country suffered from a major energy shock when the Arab Gas Pipeline was attacked several times following the Arab Spring in 2011. The repeated damage to the pipeline resulted in the disruption in the flow of gas and prompted an increase in imports of expensive fuel products for electricity generation. Jordan is living a severe energy crisis as it struggles to meet a domestic demand that is growing by more than 7% per year due to a growing population and industrial expansion.
Jordan has launched other projects
Jordan is working on various other projects to achieve energy independence. The kingdom has launched natural gas explorations and is seeking to boost solar and wind energy’s contribution to the national energy mix from 1 to 10 per cent by the end of the decade. Jordan is also close to commissioning nuclear reactors that would contribute in achieving that goal and constitute a hedge against the cyclicality of oil prices. The construction and equipping of a new liquefied natural gas port in Aqaba with an operational throughput of 490 MMcf/d and a maximum throughput of 790 MMcf/d is another project that was started in September 2012. The port is scheduled to receive the first LNG shipment by the last quarter of 2014.
Jordan could import gas from Israel
Israel’s cabinet approved on Sunday 23 June a plan to export 40% of its gas. Jordan, Israel’s immediate neighbor, might be the first to import Israeli gas. Jordan’s energy problems were accentuated by the Syrian conflict next door when it became host to 350,000 Syrian refugees. Israel has not yet decided on its export routes and markets and exporting to its immediate neighbour seems to be an easy first step. Although desperate for energy, and despite the Jordanian-Israeli 1994 peace treaty, an energy collaboration with Israel is perceived as an undesirable solution by a large number of Jordanians.
Karen Ayat is an analyst focused on energy geopolitics in the Eastern Mediterranean.
Follow Karen on Twitter: @karenayat