Page 5 - DMEA Week 26

DMEA Commentary DMEA
Gas ows
In January, state-owned Egyptian Natural Gas Holding Co. (EGAS) signed an agreement with Jordan’s National Electric Power Co. (NEPCO) which was said to entail the supply of su cient gas to meet 50% of the latter’s needs in 2019, at a price indexed to Brent crude.
e signing was attended by Zawati and her Egyptian counterpart, Tareq el-Molla.
According to reports in the Egyptian media, the volumes were in the process of being increased to 1.02bn cubic metres (bcm) per year from the level of around 0.517 bcm per year pertaining since the resumption of ows in Sep- tember. is would rise further to 2.58 bcm per year during the summer months of peak power demand.
e remainder of NEPCO’s requirements this year will be met through costlier imports of LNG via a 5.17 bcm per year FSRU moored at Aqaba, continuing to strain the kingdom’s parlous pub- lic nances.
e terms of the new deal amend a 15-year sales and purchase agreement (SPA) between the two parastatals signed in 2004. is was inter- rupted rst by the revolution of 2011 and then by the onset of a period of domestic shortage in Egypt, and was only brought to an end last year with the commissioning of the giant o shore Zohr eld.
Zawati said that the volumes enshrined in the latest pact could be revisited in 2020 when a clearer picture had emerged of Cairo’s gas pro- duction and commitments.
reserves
In April, Zawati talked up Jordan’s plans to pro- duce from its large reserves of hard-to-exploit oil shale. Various estimates suggest that 40-70 bil- lion tonnes (293-513 billion barrels) of oil shale deposits may underlie over 60% of the country’s territory and Zawati said that production could
begin within ‘three years’.
Of all the projects designed to tap into these
reserves, the most advanced is that of Attarat Power Co. (APCO). This achieved financial closure in March 2017 on a project to build a $2.1bn oil shale- red power plant and related open-cast mine with the help of a consortium of Chinese banks. APCO signed initial agreements in 2016 with Bank of China and the Industrial and Commercial Bank of China for $1.623bn in debt nancing, which will be guaranteed by the state-run underwriting company China Export and Credit Insurance.
e 500-MW facility, which will be located in the southern region of Attarat Umm Ghudran, will be the rst oil shale- red electricity gen- eration facility in the Middle East when it is complete. It is expected to consume around 10 million tonnes (73 million barrels) per year of oil shale, which can be burned directly for elec- tricity generation. e developers are Malaysia’s YTL Power International and China’s Yudean Group, with each holding a 45% stake in the pro- ject, while Ene t owns the remaining 10%. Intel ows on this project are limited, but Zawati has said that the oil shale power plant would generate 15% of Jordan’s electricity requirements by 2020.
Meanwhile, the Abu Dhabi Fund for Devel- opment (ADFD) has provided 100% funding for the development of Jordan’s $210m Petroleum Storage Facility project, which was inaugurated in mid-June.
The facilities have a storage capacity of 356,000 tonnes across 22 tanks that can hold products like LPG as well as derivatives includ- ing gasoline, diesel and Jet A-1.
While Jordan is hampered by its lack of con- ventional resources, it appears to be making the most of its strategic location, leaning on neighbours with deep pockets and world-class reserves of oil and gas, while carefully managing relations so as to avoid con ict.™
Jordan’s Zarqa re nery Source: JPRC
Week 26 03•July•2019 w w w . N E W S B A S E . c o m
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