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Arab Potash
02 июня 2014, 02:34

How Woodside's Leviathan Withdrawal Affects Israeli Export Options

Woodside’s withdrawal from the Leviathan deal leaves the door open to various speculations regarding Israel’s export strategy. The parties were engaged in serious talks that could have led to the Australian giant acquiring f 25% of the Leviathan - a 19 Tcf field located 130 kilometers of Haifa, in waters 1,500 meters deep and operated by Noble Energy. The parties had previously signed an MOU on February 7 preparing for the final signing in March 27. The closing of the deal failed to happen as expected in March due to a disagreement between the company and the Israeli Tax Authority. Despite Woodside and the Leviathan’s partners pledge to pursue their pourparlers, they recently declared the end of the negotiations saying they had ‘failed to reach a commercially acceptable outcome’. Woodside and the Leviathan partners' decision to part ways has numerous ramifications. The Australian company would have brought in its LNG expertise. Without it, it is unlikely that Israel will opt for an onshore LNG terminal to export its natural gas to export markets. If Israel did not prove to be too lenient towards Woodside, it is perhaps because the newly hydrocarbon-rich country has other plans for itself. And it is not to be dismissed that it might be inclined to diversify its export routes to ensure its robustness vis-à-vis adversity. Such a philosophy would not be hazardous; in fact, Israel suffered for a long period of time from its dependence on Egyptian gas supplies. The disruption in the flow of gas from its Egyptian neighbour due to the sabotage of the Arab Gas Pipeline was a wake-up call for Israel to achieve energy independence and strengthen its energy security. When it comes to export routes, and given the complicated geopolitics of the region, a combination of various scenarios is foreseeable. Jordan too experienced a similar vulnerability towards Egypt, given that the Hashemite Kingdom has been also highly reliant on imports from Egypt to satisfy domestic demand. Jordan too suffered from the disruption in the flow of gas in the aftermath of the Arab Spring and is currently undergoing a severe energy crisis due to that. Israel, taking advantage of the momentum, and whilst it studies possible solution to reach further markets, decided to start by exporting to its immediate neighbours: a Jordan in desperate need of cheap natural gas imports to substitute the Egyptian gas, an Egypt suffering from domestic gas shortages due to export obligations and a growing population, and the Palestinian Authority. In January 2014, the Leviathan partners entered a USD 1.2 billion deal to sell 4.75 bcm to the Palestine Power Generation Company. In February, the Tamar partners agreed to sell the Jordanian firms Arab Potash and Jordan Bromine 1.8 bcm of natural gas over 15 years for USD 500 million. Furthermore, the partners of the Tamar field signed a letter of intent with Spanish firm Union Fenosa Gas to supply gas to the company’s existing gas liquefaction facilities in Egypt. Israel would not only be selling gas to the Egyptians, but would use their export terminals to reach export markets, such as Europe or Asia where gas prices are higher than the rest of the world. Whilst exporting to immediate neighbours seems a logic and simple endeavour, Israel is unlikely to limit itself to its environs. How Israel would achieve such reach is still a matter of speculation. Because a deal with Woodside is no longer a possibility, the remaining options would be using Cyprus’ projected LNG terminal in Vassilikos, using an FLNG or exporting gas via an undersea pipeline that would connect the Leviathan field to the Turkish coast.Turkish energy companies Turcas Petrol and Zorlu Holding have recently announced that they are considering building a pipeline which may cost $2-$2.5 billion and could supply 7-10 billion cubic meters of gas annually to Turkey via a 500-kilometer undersea route. The prerequisite to such a solution remains the same: a solution to the Cyprus conflict given that such a pipeline would have to cross Cyprus’ exclusive economic zone. Joe Biden’s recent visit to the island created new hopes that the talks would this time progress and potentially reach a settlement. The second necessity is the reestablishment of trust between Israel and Turkey: despite Netanyahu’s apology to the Turks in March 2013 over the Mavi Marmara flotilla incident and the restoration of their diplomatic ties, to date, their relationship remains fragile. Karen Ayat is an analyst focused on energy geopolitics.  Email Karen on [email protected] Follow her on Twitter: @karenayat  

21 мая 2014, 04:00

The Parliament of Iraq endorses the Basra-Aqaba pipeline project

The Iraqi Parliament endorsed the project of a 1,680 kilometers pipeline from Iraq’s southern oil producing region to Jordan’s port city of Aqaba. The pipeline, expected to be operational by 2018, is of extreme importance to the Iraqis keen to diversify their export routes. It will also tremendously benefit Jordan who is in serious need of energy. The USD 18 billion dollar pipeline will pump one million barrels of oil a day from Basra Aqaba Port, and around 258 million cubic feet of gas. Jordan will use approximately 100 million cubic feet of natural gas and the excess will be exported through Aqaba generating an estimated $3 billion a year in transit fees for Jordan. Iraq's production of oil is expected to reach 4.9 million barrels per day in 2015 and 9 million barrels per day in 2020, according to Amir. Jordan’s energy crisis was mainly caused by two energy shocks. The first shock was the US-led invasion of Iraq in 2003. Until then, and since 1985, Jordan was receiving free oil from Iraq through barter agreements. Jordan also had an agreement with Egypt signed in 2001 and according to which Egypt would supply the Kingdom with 3 bcm of natural gas - enough to satisfy 80% of the country’s domestic needs - at a price indexed to oil prices, with a floor and a ceiling. Like Israel, Jordan remained highly depended on Egyptian gas until 2011. The Arab Gas Pipeline transporting Egyptian gas to Jordan was attacked several times by acts of sabotage in the aftermath of the Arab Spring exposing the country once again to its energy vulnerability. The disruption in the flow of gas forced the country to import expensive fuel products for electricity generation causing the total energy bill to jump by at least 60% according to Alaa Batayneh, previous minister of energy to the Kingdom. The Syrian immigration to Jordan is furthermore aggravating to energy crisis in the Kingdom, leading Jordan to adopt various measures to solve its energy problems: improve energy efficiency, develop indigenous resources and diversify the sources of supply. The Iraqi-Jordanian pipeline falls within the diversification initiative adopted by the Hashemite Kingdom. Jordan’s strategy to diversify its sources of supply has also led to talks with Noble Energy, the Texas-based company, over the purchase of natural gas from Israel’s Tamar field. The USD 500 million deal states that Noble will supply Arab Potash and Jordan Bromine with 66 bcf of natural gas over 15 years from Israel 10 Tcf Tamar field that came online in March 2013. Karen Ayat is an analyst focused on energy geopolitics.  Email Karen on [email protected] Follow her on Twitter: @karenayat     

Выбор редакции
16 апреля 2014, 23:17

Noble Energy reportedly bids to supply gas to Cypriot power station

Noble Energy (NBL +1.2%) - together with its Israeli partners Delek Drilling (OTC:DKDRF), Avner Oil (OTC:AVOGF) and Ratio Oil in developing the Leviathan gas field - has bid to supply gas to a Cypriot power station, according to Globes. The deal is expected to be worth ~$3B, and the report says NBL and its partners stand a good chance of winning the tender. The partners have signed two foreign gas supply contracts this year: a $500M deal with Jordan's Arab Potash Co. and a $1.2B contract with the Palestinian Authority. Post your comment!

29 марта 2014, 06:06

Индия урезала субсидию на калий на 20%

Индия - один из ключевых рынков для российского калийного монополиста Уралкалия - сократила субсидии фермерам на закупки калийных удобрений почти на 20 процентов до 9.400 рупий ($160) за тонну в начинающемся с апреля финансовом году, чтобы сдержать разбухание бюджетного дефицита, сказали Рейтер источники в правительстве и отрасли. Управляющий директор крупнейшего индийского импортера Potash Limited полагает, что в ближайшее время вслед за решением правительства о субсидиях можно ждать заключения сделок на текущий и 2015 годы. Индия, как ожидается, купит 3,5 миллиона тонн хлористого калия в течение следующего финансового года. Снижение субсидии приведёт к сохранению розничных цен калийных удобрений в Индии на высоком уровне, несмотря на падение мировых цен, лишая рынок надежды на восстановление спроса одного из крупнейших мировых импортёров удобрений. Мировые горнодобывающие компании ждали увеличения спроса, надеясь компенсировать снижение цен, вызванное прошлогодним крахом российско-белорусского торгового картеля. "Правительство в четверг одобрило сокращение субсидий до 9.400 рупий (за тонну)", - сказал правительственный чиновник, пожелавший остаться неназванным. Индия, на долю которой последние пять лет приходилось около 10 процентов мирового спроса, не имеет собственного производства калийных удобрений и весь необходимый стране объем вынуждена импортировать. Сокращение субсидий и падение курса рупии в последнее время грозят крупнейшему мировому потребителю Индии утратой этого статуса. Основными поставщиками калийных удобрений в Индию, помимо Уралкалия, являются Potash Corp, Mosaic Co, Agrium Inc, Arab Potash Co, Israel Chemicals и немецкая K+S AG. ($1=60,2150 индийской рупии)   Источник: Reuters

25 февраля 2014, 03:40

Israel: Regional Deals Amid Shaky Politics

Texas-based Noble Energy announced1 on 19 February the signing of gas agreements with Jordanian companies. Noble will supply natural gas from the Tamar field to Arab Potash and Jordan Bromine for use in their facilities near the Dead Sea. Sales are expected to commence in 2016, date that coincides with the expected completion of initial infrastructure work on the pipeline that will connect Israel to Jordan. According to Noble's press release, the price will have a floor of at least USD6.5 per thousand cubic feet of natural gas with an upside linked to Brent crude oil prices. The American giant expects gross revenues to reach USD500 million and actual sales to vary according to the quantities of natural gas purchased and oil prices at the time of sale. Noble Energy operates Tamar with a 36% working interest. Other partners in the estimated 10 Tcf Tamar include Isramco Negev 2 with a 28.75% working interest, Delek which holds 15.625%, Avner with 15.625% and Dor Gas Exploration which holds 4%. The drilling consortium is also said to be in serious and advanced talks to supply a larger amount of natural gas to Egypt. Noble energy had announced in the last quarter of 2013 its shift in export strategy indicating it was considering exports to immediate neighbors before studying further options such as building an LNG terminal, participating in Cyprus’ LNG project or building a pipeline from the Leviathan to Turkey. Israel’s history of shaky politics with its Arab neighbors puts a question mark on the feasibility of such deals. Israel has a history of natural gas dependence on Egypt and suffered from the disruptions of supplies due to various attacks on the pipeline connecting Egypt to Israel. Jordan too is suffering from a major energy crisis since the flow of Egyptian natural gas has become unreliable in the aftermath of the 2011 Egyptian revolution. The recent signed deals and talks between Israel and its Arab neighbors have however demonstrated that Israel will take advantage of the momentum of gas shortages to sell its gas and that its regional customers are in desperate need to find a cheaper and more reliable source of natural gas. Egypt is struggling to meet its domestic demand while fulfilling its export obligations. Importing from next-door Israel would be a technically simple endeavor. Public reactions are however feared as it is uncertain how the people will perceive any collaboration with Israel, let alone energy partnerships that would place both Jordan and Egypt in a position of energy vulnerability. A recent MOU signed between the Leviathan partners and Woodside for the Australian giant's acquisition of 25% of the 19 Tcf Leviathan field reflected a reviewed pricing upward that was interpreted as a deviation from the original LNG scenario towards a pipeline strategy. Woodside LNG expertise played a lesser role in influencing the price. Opting for a pipeline means that the cost involved in transporting the gas from the Leviathan to export markets will be less than the one attached to LNG undertakings and would increase the value of the field - hence the higher price tag imposed on Woodside. The outcome of Israel’s regional deals and its adoption of what has been referred to as ‘pipeline diplomacy’ is yet unclear in a part of the world marked by years of confrontations and mutual distrust. What is certain is that Israel has abundant quantities of natural gas to export and will not stop at its immediate surrounding. Other plans are currently in the process of taking shape. The recently resumed Cyprus’ peace talks could pave the way for a Turkish pipeline via Cyprus’ EEZ that might also be advantageous for Cyprus if Israel decides to simultaneously process part of its gas via the island’s LNG. Israel diversified routes and options would ensure the continuity and security of its sales. Whether energy will achieve peace and prosperity through common economic interests might be too optimistic and premature of an assumption. Further developments are happening in the region, with Lebanon also in the process of developing what is believed to be abundant deposits of oil and natural gas and has demonstrated its attractiveness to international oil and gas majors. It will not be before another decade for the whole Eastern Mediterranean energy map to take shape. 1- Noble Energy's press release is accessible via this link http://investors.nobleenergyinc.com/releasedetail.cfm?ReleaseID=826568  Karen Ayat is an analyst focused on energy geopolitics in the Eastern Mediterranean.  Email Karen on [email protected] Follow her on Twitter:[email protected]    

23 февраля 2014, 22:22

Natural Gas in Europe - Week 8 Overview

Gas industry experts have long hinted the importance of infrastructures to increase efficiency in Europe. Despite the escalation of violence in Ukraine and the related energy security risks, the eighth week of the year unveiled some major projects that could push the Old Continent in the direction of higher competition and differentiation.  CYPRUS AND ISRAEL At the beginning of the week, the Cypriot minister of Energy Yiorgos Lakkotrypis met with the high management of ENI in order to finalise an MOU agreement for the participation of the six-legged energy company in the island’s LNG project. A similar document was previously signed with Total and Noble. Cyprus’ multi-billion dollar LNG plant would convey more flexibility to the island’s export strategy. The project is now pending further exploratory results that would ensure its commercial viability. Total, ENI-Kogas are scheduled to start exploration activities towards the end of 2014. On Wednesday, the partners in the Tamar project signed an agreement to export natural gas to consumers in Jordan. Arab Potash and Jordan Bromine will receive gas for an initial term of 15 years from 2016. The total gross quantity is approximately 66 billion cubic feet of natural gas. “The execution of this agreement evidences the growing regional opportunities for our natural gas and brings forward value for the Tamar asset.  We have now signed the first regional export agreements for both Tamar and Leviathan, and we are in a number of additional negotiations to sell significant quantities of natural gas from both fields to multiple customers," Keith Elliott, Noble Energy's Senior Vice President, Eastern Mediterranean, commented in a note released on Wednesday. PIPELINES: SOUTH STREAM AND TAP In the meantime, the two major under-construction pipelines to Europe are proceeding as expected. On Wednesday, the South Stream project confirmed its intention to construct a 59-kilometer gas pipeline branch to bring gas to consumers in Bulgaria, Turkey, Greece and Macedonia. ‘Despite the numerous opponents of South Stream and the opinions of European sceptics doubting the success of the project aimed at constructing a new gas trunk line from Russia to Southern and Central Europe, it is progressing at a fast pace,’ reads the Gazprom Magazine. The project confirmed that the gas pipeline commissioning is scheduled for December 2015. The full design capacity of 63 billion cubic meters a year is expected in 2018. A few hours later, on Thursday, Trans Adriatic Pipeline (TAP) AG announced the second phase of the market test, requesting interested parties to register before 7 March 2014. TAP, the pipeline connecting Azerbaijan to Italy, will start the Booking Phase to expand capacity on 17 March. The project was endorsed by the European Commission, which added it to the list of 250 key energy infrastructure projects that will benefit from accelerated licensing procedures.  NEW OPPORTUNITIES IN ESTABLISHED COUNTRIES More competition is the other side of increased differentiation. When these new projects will bring new gas to Europe, traditional exploration areas will come under mounting pressure. It comes as no surprise that Norway’s government could promote energy law changes in order to align local costs of exploration with neighbour countries, aware of the rising importance of legislation for production from floating rigs. “That is one of the thing we need to consider. The need for drilling capacity from floating rigs will become even greater,” Petroleum and Energy Minister Tord Lien recently said. Other traditional producers are trying to gain momentum as well. Romania reported a year-on-year increase of hydrocarbon production for the first time since Petrom’s privatization in 2004. The Romanian company and Austria’s OMV both see good opportunities onshore and in the Black Sea. Bucharest could take advantage of a better business environment stemming from its liberalization programme. On the other hand, United Kingdom’s Centrica is switching its attention from North Sea to Norway and North America, trying to reverse the on-going production decline. The British company sees a difficult year ahead.  ‘Market conditions are set to remain challenging in 2014 with margin pressures and unusual weather patterns on both sides of the Atlantic, rising unit costs in the North Sea and weak economics for gas storage and gas-fired power generation,’ Sam Laidlaw, Centrica Chief Executive, commented in a note released on Thursday. In this sense, the next months will remain tough despite increasing opportunities and new projects pushed forward by the European Union. The main risk from Brussels would be a worsening of its ties with Moscow and the situation in Kiev could not be underestimated. It remains a source of risk for gas transit and for cooperation between Russia and Europe. Sergio Matalucci

21 февраля 2014, 00:47

Israel and Jordan Sign Gas Deal

Israel and Jordan signed a deal on February 19 in which Israel will supply Jordan with $500 million in natural gas over a 15-year period. The deal could be merely the first step, however, in a partnership that could potentially expand to an astonishing $30 billion. The gas will come from Israel’s Tamar natural gas field offshore in the Mediterranean and deliveries are expected to begin in 2016.The gas will be sent to Arab Potash, a Jordanian fertilizer company. Jordan has few indigenous energy sources, relying on neighbors to fuel its economy.…Read more...

19 февраля 2014, 21:37

Tamar Partners Sign Deal for Gas Export to Jordan

The partners in the Tamar project signed an agreement to export natural gas to consumers in Jordan. Arab Potash and Jordan Bromine will receive gas for an initial term of 15 years from 2016, once minimal required pipeline infrastructure has been completed. The total gross contract quantity of approximately 66 billion cubic feet of natural gas. “The execution of this agreement evidences the growing regional opportunities for our natural gas and brings forward value for the Tamar asset.  We have now signed the first regional export agreements for both Tamar and Leviathan, and we are in a number of additional negotiations to sell significant quantities of natural gas from both fields to multiple customers," Keith Elliott, Noble Energy's Senior Vice President, Eastern Mediterranean, commented in a note released on Wednesday. Noble Energy operates Tamar with a 36% working interest.  Other interest owners are Isramco Negev 2 with 28.75%, Delek Drilling with 15.625%, Avner Oil Exploration with 15.625%, and Dor Gas Exploration with the remaining 4%.  The Tamar, which is a field off the coast of Israel, has an estimated 10 trillion cubic feet of discovered natural gas resources. According to a note released by Delek Group, the determined gas price is linked ‘mostly to the prices of Brent and includes a floor price.’

19 февраля 2014, 17:29

Noble Energy to sell Tamar gas to Jordanian customers

Noble Energy (NBL) agrees to supply natural gas from the Tamar field offshore Israel to Jordan customers Arab Potash and Jordan Bromine, marking Israel’s second gas export deal in the region. The agreement is for an initial term of 15 years and a total gross contract quantity of ~66B cubic feet of gas; gross revenues are estimated at $500M. Jordan is seeking to secure its energy supply after repeated disruptions to imports of Egyptian fuel as a result of pipeline bombings in Sinai. Post your comment!

13 декабря 2013, 23:25

Noble, Delek near deal to sell Israeli gas into Jordan

Noble Energy (NBL -1%) and Delek Group (OTCQX:DGRLY), which are developing natural gas fields offshore Israel, are nearing a politically sensitive deal to supply gas to Jordan, WSJ reports. The deal would involve extending a gas pipeline from an Israeli chemical plant to a fertilizer plant in Jordan owned by Arab Potash, which is 28% owned by Potash Corp (POT). A deal would move Israel closer to exporting energy for the first time in its history, and could open a major economic link and provide a springboard for a much bigger supply deal between the neighboring countries. 1 comment!

Выбор редакции
26 июня 2013, 20:19

Jordan reportedly is holding talks to become the first country to buy natural gas from Israel, which recently approved a plan to export 40% of offshore energy reserves. A link to Jordan could be established "relatively quickly" by extending a pipeline across Dead Sea salt pools from an Israel Chemicals (ISCHY.PK) plant to an Arab Potash plant. APC's top shareholder, Potash (POT), may be eager to make the connection to lower production costs.

Jordan reportedly is holding talks to become the first country to buy natural gas from Israel, which recently approved a plan to export 40% of offshore energy reserves. A link to Jordan could be established "relatively quickly" by extending a pipeline across Dead Sea salt pools from an Israel Chemicals (ISCHY.PK) plant to an Arab Potash plant. APC's top shareholder, Potash (POT), may be eager to make the connection to lower production costs. 1 comment!

Выбор редакции
16 мая 2013, 03:01

Jordan: An Interview with H.E Alaa Batayneh, Former Minister of Energy and Mineral Resources

Natural Gas Europe was pleased to have the opportunity of conducting an interview with His Excellency Mr. Alaa Batayneh, former Minister of Energy and Mineral Resources in the Government of the Hashemite Kingdom of Jordan.   On Jordan’s energy history Energy is a major challenge to our budget. We import 97% of our total energy needs. The remaining 3% is made of natural gas produced locally at the Risha field in the eastern desert near the border with Iraq. Various energy shocks led to our National Energy Strategy: Increasing our reliance on national resources Diversifying the sources of energy Historically, Jordan benefited from special relations with its neighbours. For many years, the Kingdom had access to either free or cheap oil from Iraq. The preferential treatment was the result of a grant given by Iraq to Jordan. Since 1985, barter agreements with Iraq to trade goods for crude oil also removed some of Jordan's oil bill from the balance sheet. The price of oil was capped at 19 USD per barrel. Following the war in Iraq, things changed. Jordan no longer had access to free oil (except for a Saudi and Kuwaiti grant of some barrels of oil in 2003 and 2004). In the absence of indigenous resources, the Kingdom started importing its oil at international prices. The second major energy crisis followed the Arab spring: Gas from Egypt stopped flowing after the Arab Gas Pipeline was bombed over 15 times in a period of 15 months. Jordan did not foresee the disruptions in its energy supply as a result of the Arab Spring, hence no measures were taken to develop its own resources. Given its previous access to cheap energy resources, such measures wouldn’t have been lucrative. Now that oil sells at over USD 100, the Kingdom’s keen and speedy interest in exploring and developing its national resources is highly justified. The fact that Jordan is unexplored gives us a lot of hope. New laws were approved to allow the exploration and development of our national resources and to allow full investment and ownership by the private sector. The Natural Resources Authority (NRA) has limited resources to overtake this task alone. It acts as a regulator and also an instigator issuing permits, undertaking studies and attracting investors. Source: Jordan Atomic Energy Commission On the reasons behind the disruption of the flow of gas from Egypt to Jordan The Egyptians gave us numerous reasons to justify the disruption of the gas flow from Egypt to Jordan: First, our Egyptian counterparts alleged it was due to “low prices”. The Jordanian Government agreed to double the price of the Egyptian gas bought by the Kingdom in return for increased quantities.  Second, the Egyptians alleged the disruption was due to a “Force Majeure”. They considered that the bombings of the Arab Gas Pipeline that exports gas from Egypt to Jordan fall under the ‘force majeure’ clause (a force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God. Source: Wikipedia). However, the Jordanian Government requires supporting documents and reports to settle this matter accordingly as per agreement. Third, the Egyptians alleged that 'technical reasons' were behind the disruption: the lack of maintenance of the gas fields. Jordan understands that Egypt has its own energy problems: frequent power outages and a growing population increasing its energy consumption. However, the agreement between Egypt and Jordan is an international agreement that is legally binding. The lack of Egyptian gas hit our budget severely (by JD 1.4 billion or the equivalent of USD 2 billion yearly for the past two years). Subsidies on oil and fuel prices were lifted and a compensation scheme to the public was created. The Egyptian Prime Minister visited Jordan late last year and promised to solve the problem: the amount of Egyptian gas received by the Kingdom increased slightly after his visit but did not reach the terms of the agreement. Technical teams from both the Jordanian and Egyptian sides are to meet to identify the actual quantities lost and which article of the agreement applies: In the case of a force majeure, no compensation will be due.  In the case of a gross negligence, the Egyptians will have to compensate the Jordanians for the quantities lost. The follow-up process is on its way, but it will take years before it is completed and years before Jordan is compensated adequately for the lost quantities. The amount of gas that was exported to Jordan is low compared to Egypt's daily production. Egypt produces an average of 5.8 billion cubic feet of gas per day, and its contract with Jordan is to export 253 million cubic feet per day (which represents approx. 4% of total production). The exported amounts are therefore negligible to Egypt but are essential to the Jordanian economy. Focusing on our national resources has hence become a matter of urgency. Ensuring Jordan’s security of supply is necessary. We are working on various projects to maximise our chances of becoming energy independent or at least reducing our reliance on imported energy. On natural gas BP announced in October 2009 that it is to join Jordan’s state-owned National Petroleum Company (NPC) to exploit the onshore Risha concession in the north east of the country. The Risha concession, awarded by the Government to NPC, covers an area of about 7,000 square kilometers and includes the Risha gas field. In June 2012, BP began and later completed drilling the first deep well in its concession in the Risha natural gas field in eastern Jordan, near the border with Iraq, and now started drilling their second well. The drilling followed a "very successful 5,000 square km seismic acquisition programme in 2011". We hope intensive exploration and drilling at Risha will lead to the discovery of extensive recoverable gas reserves, which will help cut dependence on oil imports to fuel Jordan's power sector and industries and potentially turn Jordan into a natural gas exporting country. BP has already invested over $270 million to explore and evaluate the Risha block. We are hoping that the Risha field will produce anywhere between 330 million cubic feet of gas per day and up to one billion (according to their estimates) by 2020. Our current electricity generation needs amount to 250 million cubic feet per day. On oil shale Royal Dutch Shell followed, investing over $100 million to explore oil shale in Jordan's eastern and northern regions. In 2009, the Government of Jordan (GOJ) signed an agreement with Shell International through its local branch, Jordan Oil Shale Company (JOSCO), in which GOJ has given JOSCO the concession to explore oil from oil shale within a predetermined land space in an attempt to realise Jordan’s master plan: energy self-sufficiency. We expect Shell to start producing oil by 2023 according to their timeline. Jordan has 70 billion tonnes of oil shale, according to new estimates. This is equivalent to 7 billion tonnes of crude oil. With an improved technology, the price of production of one barrel could be as low as $70-85. With an alarming 7.4% increase in the rate of electricity consumption (and compared to the international average of 2% increase), it is imperative that Jordan works simultaneously on various projects in the hope of achieving a diversified energy portfolio whilst decreasing its dependence on expensive oil imports. The increase in our energy consumption is mainly due to an alarming increase in population: Syrian immigration resulted in a 10% population increase in just over a year. On renewables The Government is also working on solar and wind. Jordan is blessed with 315 days of sun. The speed of wind is 7 to 9 meters per second. The numbers encourage our use of renewables. We have signed 30 MOUs with 30 international consortiums. We expect to produce 1000 Megawatt of electricity (500 from wind and 500 from solar (mainly PV)). To expedite execution, the Government adopted a declared fixed tariffs at which it is willing to buy the electricity as long as the private sector's offers are formulated and approved by the end of 2013. We have adopted laws enforcing the installation of solar water heaters on every new building in Jordan. The new law came into force in April 2013. Additionally, it allows households to generate their own electricity from renewable energy and to sell the surplus to the grid through 'Net Metering'. On a new LNG port in Aqaba: An LNG port in Aqaba would allow imports of liquefied natural gas as a supplementary source to satisfy the current and future demand of natural gas, and guarantee a continuous flow of gas, with competitive prices to assist in reducing the cost of electricity production. The project consists of the construction and equipping of a new liquefied natural gas terminal in Aqaba with an operational throughput of 490 million cubic foot per day and a maximum throughput of 790 MMcf/d. The project started in September 2012, and the port is scheduled to receive the first LNG shipment by the last quarter of 2014. In late February, the ministry selected Golar LNG Ltd. to supply the floating storage and regasification unit (FSRU). We are not only focused on the price of energy but most importantly on the security of the supply. On the Iraqi-Jordanian pipeline: H.E. Alaa Batayneh finalised the principal agreement with the Iraqis to build a major pipeline of 1,680 km that will run from Iraq’s southern oil-producing region, Basra, to the Anbar province and then to Jordan’s port city of Aqaba. On importing gas from Israel Israel and Jordan signed a peace treaty in 1994 that normalized relations between the two countries and resolved territorial disputes. Royal Jordanian airline for example is the only Arab airline that flies into Israeli airspace. In February this year, Jordan’s Arab Potash Company discussed with its Israeli counterpart the possibility of importing Israeli gas. Such a decision would have to be taken solely by the APC depending on the viability of the study. In this scenario, the Government of Jordan will formalize the relation as it would be a cross-border agreement. Conclusion Although BP is conservative about its projections, the fact is that it already invested large amounts of money in the development of natural gas in Jordan signals its trust in Jordan’s resources. The years ahead will be challenging but we truly believe it will take 6 to 7 years before Jordan becomes partly energy independent and possibly an energy exporter. What we are certain about is that Jordan will not be importing 97% of its energy needs in the future. By 2020, we aim to achieve a diversified energy portfolio constituted of the following: 10% renewables 14% oil shale 25% natural gas 1% interconnectivity 12% nuclear 38% imported oil products Karen Ayat is an analyst focused on energy geopolitics in the Eastern Mediterranean. Follow Karen on Twitter:[email protected] His Excellency Mr. Alaa Batayneh Alaa Batayneh was born in Amman in 1969. The eldest son of H.E. Dr. Arif Batayneh, formerly member of the Lower House of Parliament, the Senate, Minister of Health, and Director General of the Royal Medical Services. Mr. Batayneh holds a BS in Electrical Engineering and MS in Management Information Systems from George Washington University in Washington DC. After working in the USA and in the UK for several years, he returned to Jordan to work in the private sector where he was running a consultancy company. He then held the position of Secretary General of the Ministry of Transport from 2000 until 2005, followed by becoming the Director General of Jordan Customs from 2005 until 2007. He was appointed Minister of Transport from November 2007 - April 2012. In May 2012 Mr Batayneh was appointed Minister of Energy and Mineral Resources. He received the Grand Cordon of the Order of Independence on 25/5/2006 and the Grand Cross of The Order of Orange-Nassau on 25/10/2006. Mr. Alaa Batayneh married Princess Rahma bint El Hassan in July 1997 and they have two children.  

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18 февраля 2013, 14:40

Иордания ведет переговоры о покупке израильского газа

Иорданские СМИ сообщают о том, что компания Arab Potash Company ведет переговоры о покупке израильского газа.

09 февраля 2013, 02:01

Efraim Chalamish: Israeli Elections and Foreign Investors

While recent elections in Israel have led to Benjamin Netanyahu's re-election, there are many uncertainties around the profile of his new coalition and its impact on foreign and economic policies. A lot has been said about Israel's vote to re-energize the peace process with the Palestinians and the need to adopt social and economic policies that help Israel's Middle Class to deal with inequality, poverty, and inflation. Clearly, a more secured Israel, both politically and economically, will be able to reach a better rating in global markets and more foreign investments, the backbone and ultimate engine of the Israeli economy. Yet, will the Israeli Government change its policies towards foreign investors? The previous Israeli government initiated several structural and economic reforms in order to respond to local market's demand. It restructured the off-shore drilling market, for example, and proposed legislation that separates real holdings from financial holdings. While these reforms can improve Israeli economy's performance in the long run, it has been perceived by many foreign investors as a sign of policy inconsistency, protectionism, and business ambiguity. Will this trend continue and how can the Israeli government respond? The need to respond to local political forces post-elections would likely empower many of these reforms. Since the legislation process and its implementation may take several years it would leave many foreign investors in an uncertain position. Moreover, the potentially over-fragmented and fragile new coalition might not last long enough to adopt many of its own proposed laws and reforms. It is a fact; very few Israeli governments reached their full term. Another important factor to keep in mind is Israel's macroeconomic circumstances. Deficit is high and a potential recession is looming, which would probably lead to higher corporate taxes and less incentives available for foreign investors looking for tax havens. Last year Israel rejected Intel's proposal to build another new plant in Israel for significant subsidies and tax-free regime. Intel invested in Ireland instead, and positive results are already being reported there. The increasing military conflicts in the Middle East following the 'Arab Spring' would reduce the chances of serious budget cuts in Israel. Another military conflict in the North may lead to an even higher budget in 2013-2014. All the same, local companies could use all the foreign financing they could get. A shrinking corporate sector and structural reforms may force many companies to look for new sources of funding abroad. Low valuations and an attractive developed regulatory environment may trigger a wave of investments by leading Western and Chinese multinational corporations. It will be Israel's responsibility to assure foreign investors that they are welcome and secure a stable and consistent economic and regulatory environment. Recent precedents are not encouraging, though. A potential transaction between Potash Corp, a leading Canadian manufacturer of fertilizers, and CIL, an Israeli public company and a world leader in the potash industry, has created a stir, accompanied by mixed feelings. While many think that merging a leading Israeli potash corporation into its large Canadian competitor reflects very well on the strength and promise of the Israeli market and economy, others claim that this is an attempt to take over strategic national assets that may eventually harm CIL's operations, employment and jobs, commodities' pricing, and Israel's national security. A (secret?) meeting between CIL's Chairman and Canada's Foreign Minister in Davos has been leaked to media recently. You can imagine what has been discussed in the meeting. Recently, I have argued that the Israeli Government can do a lot to help and facilitate such transactions. For instance, Israel can establish a permanent National Investment Committee that independently and a-politically screens and approves foreign investment in "strategic industries", similar to other Western economies. A National Investment Committee for foreign investments, I argued, would enhance the transparency and consistency required for the investment process as these values are at the heart of any foreign investor's business model. As analysts and investors look carefully at the result of recent Israeli elections , they should not get distracted by endless discussions about Middle East politics and military draft. They may want to hone on the government's annual returns. The devil is in the details.