Jordan to receive Iraqi oil next month

Jordan is to import heavy oil from Iraq starting September as energy officials in Amman search for alternative energy sources in light of disrupted natural gas supplies from Egypt. According to Minister of Energy and Mineral Resources Khaled Toukan, officials are awaiting logistical procedures to fulfil an agreement inked between Amman and Baghdad in June under which Jordan is to receive 30,000 tonnes of heavy oil per day at a $88 per tonne discount. Meanwhile, Jordanian officials are exploring options for short-term energy relief as pumping of Egyptian gas has yet to recover from an attack on the Arab Gas Pipeline last month. “We are currently studying all options and we will utilise whatever energy sources we can get,” Toukan told The Jordan Times over the phone yesterday. Officials have yet to be informed by Cairo when supplies will resume, as both sides consider an amended gas agreement bringing an end to a favourable pricing structure under which Jordan received gas at prices less than half the international rate. Egyptian authorities previously estimated that repairs on the pipeline, which were damaged on July12 in what marked the second Sinai explosion less than a month, would take 7-10 days. The unreliability of Egyptian gas supplies, which the Kingdom relies on for 80 per cent of its electricity generation needs, has pressured Jordanian authorities to look for alternative energy sources, including the import of liquefied gas from Qatar and natural gas from Iran. The Kingdom is currently purchasing heavy oil and diesel from the international market to sustain electricity generation at a cost of over $3 million per day. The continuous disruptions in Egyptian gas supplies cost the Kingdom a total of JD637 million in the first half of the year, according to finance ministry estimates. As part of decision makers’ drive for liquefied gas, plans are in place to construct an offshore terminal in the Port of Aqaba by 2013, with Jordan receiving initial interest from Royal Dutch Shell, British Petroleum, Lemont/General Electric and Al Fijr. The search for alternative energy imports comes as Amman attempts to address a five-year gap ahead of the development of domestic energy sources including oil shale, solar, wind and nuclear power. The Kingdom currently imports 97 per cent of its energy needs at a cost of one-fifth of the gross domestic product.