Jordan prepares to start construction on oil shale power facility

22 February 2016

Construction work on the scheme will begin in June

Jordan is planning to start construction of its planned $2.2bn oil shale power plant in June.

In a press statement, Ibrahim Saif, Jordan’s Minister of Energy and Mineral Resources said that construction of the 470MW oil shale-fired plant would begin before the end of the June.

The Attarat Power Company (Apco), a wholly-owned subsidiary of the local/Estonian Enefit Jordan which is developing the plant, signed a power purchase agreement (PPA) with Nepco, Jordan’s National Electricity Company, in 2014 to provide electricity from the region’s first oil shale-fired plant.

Apco will provide electricity for a period of 30 years from financial close, and Nepco has the right to extend the agreement for an additional 14 years following this. The company will provide power at a levelised tariff, comprised of capacity and energy components. This involves a royalty payment of JD1.5 ($2.1) for every mined tonne of oil shale.

In January, Apco selected the Chinese contractor Guangdong Power Engineering Corporation to build the shale-oil fired plant. Guangdong Power was one of six groups that submitted bids in April 2013 to build the plant and will build the facility 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.

The majority of funding for the project will come from the Bank of China and the Industrial and Commercial Bank of China. The deal for $1.6bn of financing was signed in January this year.

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 part of Jordan’s efforts to diversify its energy resources and reduce the cost of energy imports to the kingdom of more than JD350m ($494m) a year. Jordan currently imports about 97 per cent of its total energy needs. The total investment value of the project is estimated to be $2.2bn, which makes it the largest externally financed project in the kingdom to date.

In an effort to reduce its dependence on other countries, Jordan 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.

A MEED Subscription...

Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.