JORDAN: Jordan's growing energy needs

21 July 1995

JORDAN'S energy needs are growing and Minister of Energy and Mineral Resources Samih Darwazeh is looking for private investors to meet them, and meet them quickly. 'As a government we want to change and do things as fast as we can, but we still believe the private sector can move faster.' he says. Darwazeh is confident that finance for new projects can be found both domestically and from abroad and increasingly he is looking at projects that will not only meet domestic.demand but will establish Jordan as a regional supply centre.

The US' Enron Corporation is to submit a proposal to the Jordanian government by the end of August for the establishment of handling facilities in Aqaba for 2.5 million tonnes a year (t/y) of Qatari LNG, half a million of it for Jordan and the balance for export. Darwazeh says Jordan has an increasing interest in using LNG as a cheaper, cleaner source of energy but it is not confining itself to the possible Qatari supply. Egypt, Saudi Arabia and, ultimately Iraq, are all possible sources, he believes.

The Ministry is now interested in studies for a nation-wide pipe network that would connect the Aqaba, and Zerqa thermal power stations and Al- Risheh gas station in north east Jordan with potential suppliers. It has also invited offers for a $1,000 million BOO oil refinery in Aqaba. Darwazeh wants 250,000-barrel-a-day (b/d) capacity off-shore refinery to serve mainly for export purposes, but also to guarantee Jordan's needs. Jordan now uses 1 million tonnes of fuel oil annually but this will rise to at least 2.8 million tonnes within 15 years and JPRC capacity is Jordan's current domestic oil refining capacity is only 60,000 b/d.

Interest in a third power station to supplement the Zerqa and Aqaba stations is also being canvassed. (MEED 9.6.95) Contracts for the second stage of Aqaba have just been awarded (MEED 2.6.95), but with electricity needs expanding by around 10 per cent annually. New capacity will be needed within a year of the completion of Aqaba II in 1997 and will enhance southern Jordan's attractions for new industry.

An electricity law to be considered during Jordan's current parliamentary session, will allow the government to licence private generating companies and end the current monopoly of the Jordan Electricity Authority. Jordan's oil and gas exploration effort is also getting the privatisation touch. National Resources Authority (NRA) exploration activities are being handed over to the new JD 20 million ($29 million) National Petroleum Company (NPC), a public share holding company wholly owned by the government's investment arm, the Jordan Investment Corporation (JIC). JIC is providing JD 2 million ($2.9 million) in working capital for the company and the JD 18 million ($26 million) will come from National Resources Authority (NRA) plant and equipment, including Al-Risheh Gas station and Hamza oil well in north east Jordan. The company will divide oil and gas revenues from Al-Risheh and the Hamza oil field on a 50/50 basis with the government but will function as a totally independent company and will have the option to sell shares to the public within two to three years.

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