Shell to supply Jordan with liquefied gas for five years

AMMAN — Royal Dutch Shell will start supplying liquefied natural gas (LNG) to a terminal in Aqaba in July, Minister of Energy and Mineral Resources Mohammad Hamed said Wednesday.

Under the agreement between Shell and the National Electric Power Company, Shell will provide the terminal with 150 million cubic feet of LNG per day, said the minister after the signing ceremony.

Under the five-year agreement, Jordan will pay some $500 million per year during the agreement's period at the current prices of LNG.

"This is a very important deal for Jordan and part of our efforts to diversify energy resources," Hamed told The Jordan Times.

The quantities Shell will supply each day cover some 25 per cent of the power company's daily needs for power generation, according to the minister.

Meanwhile, the minister said that starting July, the power company will start buying 100 million cubic feet per day from international markets as part of efforts to reduce losses and shift to less expensive gas than diesel and heavy fuel for power generation, said the minister.

The minister added that work on the terminal is about 78 per cent complete and that all necessary equipment and measures are already in place to start receiving the LNG.

At the signing event, Thomas Meijssen, general manager and country chair of the Jordan Oil Shale Company, fully owned by Shell, stressed the importance of the agreement in meeting Jordan’s energy needs.

Jordan, which annually imports about 96 per cent of its energy needs, seeks to diversify its energy sources following repeated cuts in natural gas supplies from Egypt, which forced the Kingdom to buy heavy fuel and diesel for power generation.