No wonder it's going nuclear: Jordan says Egypt's gas disruptions to cost it over $2 billion
Ongoing cuts in Jordan’s Egyptian gas supplies are set to cost the country over $2 billion by the end of the year, officials revealed on Monday, calling for greater efforts to diversify the country’s energy mix.
Cuts in Egyptian gas supplies over the past two months cost Jordan an additional JD230 million, raising the projected total cost of the ongoing disruptions of the country’s primary energy resource to JD1.42 billion (around $2 billion), Energy Minister Mohammad Hamed said.
“The lack of Egyptian gas continues to force us to rely on diesel and heavy oil, which is placing a huge strain on distributors and the government,” Hamed said at a joint press conference in Amman to announce the selection of a Russian firm to construct the country’s first nuclear reactors.
According to ministry sources, Egyptian gas supplies have dropped to “negligible” quantities since September, after hovering around 50 million cubic feet (mcf) per day for most of the year — well below the 240mcf stipulated in a joint agreement between Amman and Cairo.
Egyptian officials have attributed the drop to various factors, including technical delays in repairs after several acts of sabotage on the pipeline and a rise in domestic energy demand.
The loss of Egyptian gas supplies, which used to account for over 80 per cent of Jordan’s electricity generation needs, has driven generation costs to over 187 fils per kilowatt hour (kw/h) — more than double the average 87 fils per kw/h rate distributors are charging consumers.
Hamed said the gap has cost the government more than JD500 million in subsidised electricity to residential consumers alone, adding that a proposed rise in electricity tariffs will fail to close the widening gap.
Jordan imports over 97 per cent of its energy needs at a cost of one-fifth of its gross domestic product.
As per the country’s national energy strategy, officials aim to boost domestic energy output from 3 per cent to over half the country’s energy mix with a series of oil shale, natural gas, renewable energy and nuclear power projects.