Jordan: Evolutions in energy

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In an effort to satisfy a growing appetite for energy, Jordan is working to wean itself off costly imported oil and make better use of its own resources. The country hopes to attract $14bn in investments in energy infrastructure, including the construction of a nuclear reactor scheduled to come on stream in 2018, and efforts focused on developing renewables and oil shale.

Jordan has good reason to seek alternatives, as about 95% of its energy is currently imported, with the bill for this coming in at around 13% of GDP. In a report on renewable energy published in December 2010, the Jordan Investment Board (JIB) forecast that energy demand will double between 2008 and 2020. It also predicted that the percentage of oil making up that demand will decrease from 60% in 2008 to 45% in 2020, with natural gas, oil shale and nuclear power making up the difference.

At the same time, the JIB expects energy imports to decrease to about 60% by 2020, from 95% at present, as domestic production picks up. The country’s main goals are to maximise the use of domestic resources, including oil shale and gas; to expand the development of renewable projects; and to generate electricity from renewable sources. The report identified 18 projects for investment, including wind farms, a solar equipment packager and a high-density insulation company.

Recent nuclear cooperation agreements signed with 10 countries – Argentina, Canada, China, France, Japan, Romania, Russia, South Korea, Spain and the UK – further highlight the country’s efforts to reduce its dependence on oil imports. Additionally, these accords are paving the way for the transfer of knowledge and training support.

One ambitious solar project in the works involves piping salt water from the Red Sea to the coastal city of Aqaba. This could transform the region from an arid, dry plain into an oasis. Seawater greenhouses and concentrated solar power will combine to grow crops, produce carbon-neutral energy and desalinate seawater, possibly as soon as 2012, with commercial use coming on-line in 2015. The company backing the development is the Sahara Forest Project, an environmental technology group from Norway.

There is also great potential in Jordan’s oil shale reserves. The World Energy Council estimates that there are 40bn-60bn tonnes of oil shale in Jordan, which would make it the second-richest country in terms of rock oil reserves. According to Jordan’s National Energy Strategy domestic demand for oil shale will reach 976,000 tonnes of oil equivalent (toe) in 2015 and 2.4m toe in 2020.

The oil shale found in Jordan is also of higher quality than that in the US, where most oil shale is currently being discovered. A recent deal with Shell is expected to produce the first commercial output in 2020, with an estimated rate of 50,000 barrels per day of oil from oil shale.

But the potential for more conventional hydrocarbons discoveries has not been forgotten either. A recent agreement with Russia’s energy minister, Sergei Shmatko, encourages private and public Russian companies to explore for oil and gas in Jordan. It allows for direct investment in exploration projects and joint ventures with private Jordanian companies, as well as for participation in power generation, oil shale and renewable energy. The deal also stipulates the sharing of expertise and knowledge related to production, exploration and infrastructure.

Russia is already involved in Jordan’s energy sector and the country’s ZAO Atomstroyexport, along with Atomic Energy of Canada and Paris-based Atmea, is contending for the contract to build the kingdom’s first nuclear reactor. Jordan is expected to choose one of three parties under consideration in March.

Gulf gas giant Qatar has also expressed an interest in pursuing local energy projects. Qatar’s prime minister, Hamad bin Jassim bin Jaber Al Thani, has proposed a Qatari-Jordan Investment Fund as well as water and nuclear energy ventures in Jordan. Additionally, Jordan’s prime minister, Samir Rifai, met with Ahmad Mohammad Al Sayed, CEO of Qatar Holdings, in late January to discuss the company’s involvement in the local tourism, infrastructure and energy sectors.

From shale to nuclear to solar, there is a wide range of possibilities for domestically sourced energy to power the country going forward, with all of these areas likely to benefit from foreign investment and know-how. Though reducing imports to 60% by 2020 may seem like a tall order, both the plan and the international interest in Jordan’s energy sector look strong enough to see it through.

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