Page 4 - MEOG Week 02

MEOG Commentary MEOG
Jordan gets first natural gas supplies from Israel
Jordan has begun receiving gas supplies from neighbouring Israel, though what is good news for its energy supply proving fractious in the Hashemite kingdom.
Jordan/Israel
What:
Through a previously signed agreement Israeli gas has begun to flow to Jordan’s NEPCO.
Why:
Jordan has a large deficit in gas supply and Israeli gas helps to fill that gap.
What next:
The deal is not popular in Jordan and its government will have to deal with a raft of legal actions.
TExAS-bASEd Noble Energy has begun pumping the first supplies of Israeli gas to Jor- dan, Jordan’s National Electricity Co. (NEPCO) said on January 7 amid opposition in the Hash- emite kingdom.
The supplies, from Israel’s largest offshore natural gas field Leviathan, have begun for an experimental three-month period, according to the terms of a $10bn deal NEPCO struck with Noble Energy in 2016, the state-owned power utility said in a statement.
“The experimental pumping will continue for the experimental period under the technical and contractual terms between the two sides,” said the statement by NEPCO with no further details. The supplies are expected to run until 2035.
Protests
The deal has faced opposition in Jordan, where many view Israel as an enemy country.
Activists and parliamentarians have lobbied the government for years with little success of scrapping the purchase. “It’s a black day in the history of Jordan and a crime against the nation and a national catastrophe that makes our sover- eignty hostage and the energy sector in the hands of the Zionist occupation,” said the mainstream Islamic Action Front, the country’s main politi- cal opposition.
Crowds of Jordanian protesters marched through the centre of Amman on Friday, after the Middle Eastern kingdom began receiving its first imports of gas from Israel. “It’s a black day, a catastrophe for Jordan,” said Hisham bustani, a co-ordinator for the protest movement, add- ing that the government had signed a deal that would light the country’s streets with gas “stolen from occupied Palestine”.
The Jordanian government said after signing the agreement that securing stable energy prices for the next decade could achieve annual savings of at least $500mn annually and help reduce a chronic budget deficit. Energy-dependent Jor- dan imports about 95% of its energy needs, with demand for electricity rising by 6-7% annually. According to the agreement, the overall cost for Jordan stands at $10bn, with Israel receiv- ing $8bn of that for the delivery of 300mn cubic
metres of gas daily for a period of 15 years.
but protesters say that according to the deal, Israel would be the sole beneficiary, turning it into a potential energy exporter. Meanwhile, Jordan would be locked into buying 40% of its energy needs from its erstwhile enemy. It is also averred that the deal has been forced on Jordan by the US in order to support Israel, and to sup-
port US companies who have interests in gas. The deal would have been particularly valu- able to the US-based Noble Energy and Israel’s delek Group, which has yet to produce any gas from Leviathan since it was discovered in 2010. Companies typically require agreements to be made in advance of producing gas from fields because they are so expensive to develop, so the Jordan deal would have made further deals on
the field more likely.
The pipeline goes to Israel through the north-
ern province of Mafraq and distributes the gas to the country’s power plants for electricity gener- ation. Since Israel discovered gas off its coast a little over a decade ago, only one field – Tamar – has produced gas for commercial consumption. It currently supplies nearly all of Israel’s gas. Its only non-domestic customers are Jordan’s state-owned Arab Potash and its affiliate Jordan bromine.
A letter of intent (LoI) between Jordan and the Leviathan partners was signed in 2014 but the project was held up by regulatory red tape in Israel; in 2016 it was described as an important milestone in strengthening the ties and strategic partnerships between Israel and Jordan and the entire region. The deal was never popular in Jor- dan and as the project becomes active and the full details are being made known there is con- siderable uproar.
Earlier this month, Jordanian MP Saleh Armouti, who obtained a copy of the agreement and shared it with the media, said the public had been misled by the government over the deal, and that despite its insistence that the agreement could not be cancelled, there were several ways out for Amman.
Armouti’s insistence that the deal contains legal loopholes has mobilised activists in the “National Campaign to Overturn the Gas deal
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w w w. N E W S B A S E . c o m Week 02 15•January•2020