Egypt's gas supplies to Jordan back to "normal levels"
Jordan’s Egyptian gas supplies have returned to “normal levels”, according to energy officials, after nearly two years of reduced supply due to political and technical setbacks.
According to a Ministry of Energy source, the country’s Egyptian gas supplies returned to their full levels of 240 million cubic feet (mcf) per day on Wednesday, after hovering around 150mcf over the past week and an average of 40mcf for most of 2012.
The increase in supply comes in light of a recent breakthrough in negotiations between Cairo and Amman over the countries’ 10-year gas agreement and marks the first time pumping has resumed in full since a series of sabotage attacks on the Arab Gas Pipeline in February 2011.
Following several technical and security setbacks, Egypt announced in October 2011 that it would reduce supplies designated for export in order to meet a spike in domestic demand, prompting a drawn-out dispute with Jordan.
The disruption in Egyptian gas supplies, Jordan’s primary energy source, pushed the national energy bill to a record JD4 billion and drove the cost of energy subsidies to over JD1.2 billion in 2012, officials said.
Although a welcome development, officials cautioned that the return of Egyptian gas alone will not solve the Kingdom’s growing energy crisis, as Jordan continues to rely on costly heavy oil imports for half of its electricity needs.
The National Electric Power Company (NEPCO) currently provides electricity to consumers at an average rate of 72 fils per kilowatt-hour (kwh), less than half of the company’s 188 fils per kwh generation costs, a subsidy officials describe as “unsustainable”.
Official sources say the government is currently studying various proposals to raise electricity rates to an average of 172 fils per kwh in a bid to narrow NEPCO’s burgeoning budget deficit, which previous forecasts expected to reach JD4 billion by the end of 2012.
Jordan currently imports 97 per cent of its energy needs at a cost of nearly one-fourth its gross domestic product.