Minister reviews power sector for 2000, plans for 2001
Minister of Energy and Mineral Resources Wael Sabri on Wednesday evening said Jordan's entire oil requirement in 2001 is likely to total five million tones.
“The cost will be around $750 million and it will be imported from Iraq.
Iraq will offer a grant totaling $300 million, [while] the rest of the cost [$450 million] will be paid in [barter] for Jordanian goods,” he said in a lecture organized here by the Jordanian Businessmen Association.
Jordan depends totally on Iraq as its main supplier of oil —consuming 70,000-75,000 barrels per day.
The grant portion, experts believe, will be absorbed by the treasury like other grants and was not calculated to offset higher prices in the international market.
“The Iraqi oil grant was considered as a financial support to Jordan within the overall context of the budget to support education, health and social sectors.
Consequently, the oil grant was not taken into account when the government weighed the amendment to the oil price,” said an attendee who declined to be named.
To ensure adequate power supply both for the public and the industrial sector, the ministry has recently adopted a comprehensive plan to explore and harness the Kingdom's untapped natural resources.
The ministry is currently negotiating with a private Belgian company, Tractable, to build and operate an electric power plant at the cost of $500 million.
“The 450 megawatt plant, which is scheduled to be completed and commissioned by the year 2004, will be on Build-Own-Operate (BOO) basis,” Sabri said.
The electric power status quo in Jordan is secure [at present], said Sabri, adding that the available generating capacity reaches around 1500 megawatts.
“The Central Electric Generating Company will construct a new gas turbine with 100-150 megawatt capacity to satisfy the increasing demand for electricity in 2003-2004,” he said.
Concerning power supply in rural areas, the minister said around 1,900 villages across the Kingdom are currently supplied.
“In the last decade, around JD50 million was spent for supplying the countryside with electricity,” he said.
Referring to the connection with the regional grid, he said the linkup with Egypt is functioning well and the power exchange is running on a continual basis.
“Within 10 years, Jordan will be part of an international electric power network that will connect Africa, Asia and Europe together,” Sabri said.
Many countries in the region have begun connecting to a common grid, and already from Lebanon to Morocco certain hook-ups are in place.
In line with the government strategy to encourage privatization and free market economy, Sabri said the ministry has adopted several steps to restructure and privatize the power sector. “The sector ought to work on a commercial basis,” he added.
The ministry recently announced that it would go ahead with plans for the privatization of both the Central Electric Generating Company, the Electric Distribution Company and the Irbid District Electricity Company.
The groundwork for the privatization was laid in a study carried out by Germany's Fichtner and financed by the US Agency for International Development (USAID) under a World Bank-administered fund. The consultancy work would be financed the same way, a news report said in September.
“The appointment of the consultancy firm will be done in March next year,” the minister said.
In regard to the natural gas sector, Sabri said the production of Risha Gas Field was around 30 million cubic feet per day, which is equivalent to 650 tones of oil in electricity generating capacity.
“Jordan started the exploitation of Risha field in 1989. The field helped supply Jordan with 11 per cent of electricity generation in the Kingdom annually.”
The Jordan Petroleum Refinery Company (JPRC) is working to further develop the Risha field. “The company raised the production to around 40 million cubic feet daily.”
Also, the JPRC has invited international firms to take part in developing the field, he added. The process will consist of two phases. The first, a two-year phase, is designed to determine the quantity of reserves, and will cost around $25 million.
The second phase aims to dig tens of wells and build the infrastructure needed to exploit the reserves. This step needs 8-10 years and would cost around $400 million.
According to the minister, the Prime Ministry adopted a strategy to attract international firms to invest in oil exploration and exploitation.
On October 3, UK's Star Petroleum in alliance with Black Rock Petroleum of Australia, signed a memorandum of understanding with the Natural Resources Authority (NRA) to explore for oil and gas in the northern parts of Jordan.
In mid-October, the NRA signed another memo with a Canadian petroleum company Dauntless Energy to search for oil and gas in the Al Jafer area in the south.
In November, the ministry started inviting international firms to submit proposals for building a power plant based on tapping the country's huge oil shale reserves.
This followed the ministry's September 1999 foray into such ventures, when the Canadian company Suncor Energy was granted a 12-month exclusivity period to negotiate a project to develop oil shale reserves in the Lejun area in the south.
“The government is currently negotiating with Suncor to extract oil out of rocks on a BOO basis,” said Sabri.
“It is expected that if there is an agreement with the company, the project's first phase would be completed by the end of 2006, and is expected to produce 17 thousand barrels of oil per day.”
With respect to wind power plants, the ministry in November invited world firms specializing in electricity generation from wind power to submit bids for the construction of three such plants with a 25-30 megawatt capacity.
“Wind power is available in good quantities in the north and south,” said the minister.
Protecting the environment and the public safety are goals in the ministry's long-term plan, he added.
( Jordan Times )
By Khalid Dalal
© 2000 Mena Report (www.menareport.com)