Jordanian national energy bill to reach record highs
The reliance on oil imports combined with the fluctuation of international prices has increased the National Electric Power Companys debt for 2011 to $700 million
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The kingdom is on track to spend over $4 billion on its national energy bill in 2011 in what is to be the most expensive year on record.
According to Minister of Energy and Mineral Resources Khaled Toukan, Jordan will have spent 22 percent of its gross domestic product on energy imports by the end of the year.
In an interview with the Jordan News Agency, Petra, Toukan said that the Kingdom now imports 98 percent of its energy needs, rising from 96 percent. The increase, due in part to the instability in Egyptian gas supplies and subsequent reliance on heavy fuel and oil imports, has placed further stress on a widening budget deficit and highlights the urgent need to develop local energy sources, he added.
The drop in Egyptian gas supplies, which were disrupted several times due to multiple acts of sabotage on the Arab Gas Pipeline in the Sinai Peninsula, is expected to cost the Kingdom $1 billion by the end of December. The reliance on oil imports combined with the fluctuation of international prices has increased the National Electric Power Companys debt for 2011 to $700 million, Toukan added in a statement to The Jordan Times.
Record energy costs have placed increased pressure on officials in Amman to fulfil the national energy strategy, which aims to boost reliance on domestic energy sources for electricity generation from 2 percent to 40 percent by the end of the decade. A key part of the strategy is ongoing natural gas exploration in Risheh along the Jordanian-Iraqi border, with British Petroleum recently completing a seismic study of the area as part of a multi-year, $237 million exploration phase.
British Petroleum is expected to complete feasibility studies next year, with initial estimates pointing to the potential production of up to one billion cubic feet per day. Energy officials are counting on gas production in Risheh along with the development of nuclear, solar and wind and oil shale projects to gradually wean the country off energy imports. Meanwhile, the Kingdom is continuing its pursuit of liquefied gas in order to meet an anticipated five-year gap ahead of the harnessing of domestic energy sources. The ministry is currently preparing tenders for the construction of a terminal in the Port of Aqaba by 2013, having received initial interest from several international firms including Royal Dutch Shell, British Petroleum, Lemont/General Electric and Al Fijr.