Energy dispute runs out of gas as Egypt agrees to boost Jordan's supplies
Egypt has agreed to boost Jordan’s gas supplies, Minister of Energy and Mineral Resources Alaa Batayneh announced on Tuesday, ending a months-long dispute over the country’s former primary energy source.
According to Batayneh, Egyptian Minister of Oil Osama Kamal agreed on Tuesday to raise gas quantities from a recent average of 40 million cubic feet (mcf) daily to 200mcf, minimum rate outlined in an amended agreement signed between the two sides in 2011, by the end of the month.
During a “decisive” meeting over the future of the Egyptian-Jordanian gas agreement in the Egyptian capital on Tuesday, Cairo also agreed to provide Amman with additional quantities as compensation for ongoing disruptions in supplies, Batayneh said in a statement to The Jordan Times.
Tuesday’s outcome is seen as a breakthrough in a months-long dispute over Jordan’s Egyptian gas supplies, which as recently as late 2010 accounted for 80 per cent of the country’s electricity generation needs.
According to energy ministry sources, Jordan had gone into Tuesday’s meeting prepared to “turn its back” on Egyptian gas, which Cairo suspended in early October due to a rise in domestic demand.
Due to a series of acts of sabotage and technical delays, the country’s supplies had dropped to an average of 40mcf per day, well below the 250mcf outlined in a 14-year gas agreement inked in 2004 and less than 16 per cent of the country’s electricity generation needs.
The drop in gas supplies has forced the country to rely on costlier heavy oil and diesel imports, which officials say has pushed fuel and energy subsidies to over JD2.2 billion and widened the national deficit to a near-record JD1.2 billion.
Although Tuesday’s announcement is set to relieve Jordan’s emerging energy crunch, officials say Jordan will continue to pursue alternative energy sources such as liquefied gas.
Jordan currently imports at least 96 per cent of its energy needs at a cost of nearly one-fourth of its gross domestic product.