The local Attarat Power Company (Apco) has selected the Chinese contractor Guangdong Power Engineering Corporation to build the Middle East’s first shale-oil fired plant.

Guangdong Power was one of six groups that submitted bids in April 2013 to build the 540MW plant and will build the plant under a fixed price turnkey contract.

The US’ Foster Wheeler will provide the boiler island and Germany’s Siemens will supply the steam turbines for the plant. The US’ Worley Parsons will provide plant design services.

Apco, which is a wholly-owned subsidiary of the local/Estonian Enefit Jordan, announced in December that it had submitted an electricity tariff proposal to the Jordanian government for the project with the plant scheduled to be operational by 2017.

Jordan’s Environment Ministry approved the plans for the shale oil-fired plant in June 2013 following the review of a detailed third party environmental impact assessment (EIA) submitted by Enefit. The company had been working on the EIA for two years.

The project is expected to reduce the kingdom’s expenditure on power generation by more than JD350m ($494m) a year.

Jordan is almost entirely dependent on energy imports, and the rise in oil prices over the past three years has put a lot of pressure on Amman’s finances.

The cost of importing energy increased following the political protests that spread across the region from 2011 and which disrupted cheap gas imports from Egypt and forced the kingdom to switch to more costly oil feedstock to fuel its power stations. Oil imports currently account for an estimated 25 per cent of the kingdom’s gross domestic product.

In an effort to reduce its dependence on energy imports, Amman is exploring its shale oil and gas reserves. Jordan is believed to have the fourth largest oil shale resources in the world, behind the US, China and Russia, with an estimated 90 billion-100 billion barrels of oil in its shale deposits.

In September 2012, Jordan’s Energy & Mineral Resources Ministry signed an agreement with Canadian Global Oil Shale Holdings (Gosh) to assess oil shale resources in the south of the kingdom.

Gosh will study the economic feasibility of an oil shale project in the Attarat Um Ghudran and Isphere al-Mahatain areas in central and southern Jordan. The two-year agreement also covers exploration across a total of 221.3 square kilometres.

The government has set a target of supplying 14 per cent of its energy needs from shale deposits by 2020.