Jordan is in need of gas, including from Azerbaijan

Photo: Jordan is in need of gas, including from Azerbaijan
 / Analysis

Azerbaijan, Baku, Feb. 27 / Trend /

Leyla Abdullayeva, Trend analytical centre expert

In the last two or three years, Jordan began to think about new ways of gas supply to the country. Due to political problems experienced by Egypt, Jordan lacks gas supplies and, according to official data, Jordanian losses on the short supply of Egyptian gas total nearly $ 1billion or more annually. Earlier, Jordan covered about 80 percent of the country's demand for gas through imports from Egypt.

Starting February, Egypt cut the gas supply to Jordan by 36.4 percent, from 220 million cubic feet to 140 million cubic feet. According to Egyptian media, the decline in supply is associated with the reduced production in certain fields of gas due to periodic maintenance of fields. The date of resumption of gas supplies to Jordan in full is not announced.

Earlier, irregular supply of Egyptian gas to Jordan was associated with the complicated political situation in Egypt. Egypt, a major exporter of natural gas to Jordan, itself felt an acute need for the "blue" fuel. In the past, the Egyptian section of the Pan-Arab gas pipeline has frequently been the target of terrorist attacks, which led to a break in gas supplies to Jordan. Then, in May of last year, Egypt suspended gas supplies under the contract as long as there is no new agreement with the Jordanian side, setting a higher price. In October, Egypt doubled the price of gas exported to Jordan.

For this reason, Jordan, which itself produces nearly 30 million cubic feet of gas per day, was facing the energy crisis due to difficulties associated with the need of meeting almost 10 percent of the country's electricity needs. Jordan was forced to raise domestic fuel prices for gas by up to 50 percent. This step automatically resulted in inflation and increase in the cost of basic food, which in its turn caused discontent. Due to gas supply interruptions, Jordan was forced to spend by $ 1.4 billion in 2011 and $ 2 billion in 2012 more on alternative fuel, needed to produce electricity.

Today, Jordan is ready to import gas into the country from other sources in order to reduce dependence on Egyptian gas. In particular, Jordan is in talks with countries such as Qatar, Saudi Arabia, Israel, Iran and Iraq. Purchase of gas from Azerbaijan is also on the agenda as an option.

Currently, possibility of liquefied natural gas purchases from Azerbaijan are considered as one of the convenient ways for gas supplies to Jordan and discussions are underway regarding this matter.
Acquisition of Azerbaijani gas in liquid form, in avoidance of the pipeline transportation, would have been most convenient. In addition to the difficult situation with continued purchases of gas from Egypt, it will also be difficult for Jordan to get natural gas via the pipeline going through Syria, where today the political and economic situation is no better than in Egypt.

This gas issue has been discussed between the two governments for the past few years, but implementation of the project is delayed due to some problems. The primary constraint is that Jordan is not ready for the reception and storage of Azerbaijani gas. The project for exports of liquefied natural gas from Azerbaijan will acquire a more clear shape upon completion of construction of the new terminal for reception of liquefied natural gas in the Jordanian port of Aqaba. It is known that Jordan is working on preparing the infrastructure for reception of Azerbaijani gas, and following completion of these works, talks between the parties will acquire a clearer format.

Another two options for delivery of Azerbaijani gas to Jordan have also been discussed: Azerbaijani gas may be delivered to Jordan by sea route from Turkey and land route - through joining the Azerbaijani-Turkish gas pipeline to the pan-Arab pipeline. Then it became clear that delivery of Azerbaijani gas by sea is unprofitable for both countries, and connecting the Azerbaijani-Turkish gas pipeline to the pan-Arab pipeline will take time.

In the long term, export of Azerbaijani gas to Jordan is possible with Azerbaijan becoming an important exporter of gas to Jordan. According to the Ministry of Energy of Jordan, in the case of an agreement, the country plans to purchase from Azerbaijan nearly 4.2 million cubic meters of gas per day (150 million cubic feet), which is more than 1.5 billion cubic meters of gas a year.

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Tags: Jordan