Jordan and Iraq nearing gas deal

Published March 22nd, 2012 - 07:55 GMT
Amman and Baghdad are discussing an energy agreement that would provide Jordan with natural gas to meet the electricity needs
Amman and Baghdad are discussing an energy agreement that would provide Jordan with natural gas to meet the electricity needs

Jordanian and Iraqi energy officials have entered advanced talks over a natural gas deal that would provide the Kingdom with an alternative energy source within five years.

According to Minister of Energy and Mineral Resources Quteiba Abu Qura, Amman and Baghdad are discussing “in detail” the terms of an energy agreement that would provide Jordan with sufficient natural gas to meet the majority of its electricity needs. “We are studying this very closely, and we believe this is a very attractive option,” Abu Qura told The Jordan Times.

The deal calls for the establishment of a 500-kilometre gas pipeline stretching from Iraq’s gas fields to the Kingdom’s northern desert region, with a projected five-year construction period, according to the Ministry of Energy and Mineral Resurces. The talks come amidst ongoing concerns over the reliability of Egyptian gas supplies, the Kingdom’s primary energy source, which have yet to resume since a Sinai blast earlier this month that marked the 13th act of sabotage on the Arab Gas Pipeline in a little over a year.

Ongoing cuts in Egyptian gas supplies cost Jordan JD1 billion in 2011 — a figure energy officials expect to reach JD1.7 billion this year — placing stress on a near record JD1.02 billion budget deficit that economists warn may tip the Kingdom into a “financial crisis”.

In addition to Iraqi gas, Amman is exploring the possibility of importing Qatari liquid gas, to be stored aboard a ship in the Port of Aqaba ahead of the construction of a permanent offshore terminal in the Red Sea gulf, which energy officials say will take three years to build. The rising costs of electricity production prompted energy officials to implement a 9 per cent raise in electricity rates last month, but the government suspended the decision amidst a popular backlash.

Observers say the controversy over electricity prices has highlighted the growing importance of energy independence for Jordan, which imports 98 per cent of its energy needs at a cost of nearly one-fourth of the gross domestic product.


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