You are here

Jordan signs deal to buy gas from Israel

By Raed Omari - Sep 26,2016 - Last updated at Sep 26,2016

AMMAN — The government-owned National Electric Power Company (NEPCO) on Monday signed an agreement with Noble Energy under which the latter will provide 40 per cent of the Kingdom's electricity-generating needs. 

In remarks to The Jordan Times on Monday, NEPCO said that the results of feasibility and technical studies it has conducted all indicated that the "deal would achieve an annual surplus for the company exceeding $300 million".

NEPCO also said that the deal will contribute to cutting its power-generation costs and "consequently avert sharp hikes in prices of electricity during the coming years".

NEPCO put the validating reasons behind the deal as part of its strategy to diversify energy resources in light of disruption in Egyptian gas supply to the country.

The company also said that signing the deal with Noble Energy will enhance regional cooperation and will make Jordan part of the project of the EU and the Union for the Mediterranean to utilise the gas fields discovered in the East Mediterranean.

In addition to the natural gas provided by Noble Energy, NEPCO said that the deal will allow Jordan utilise the gas fields discovered in Palestine, Cyprus and Egypt.

Noble Energy owns 39 per cent of the Leviathan natural gas field in Israel.

NEPCO only said that the 1994 Jordanian-Israeli Peace Treaty regulates the two countries' energy relations. 

In September 2014, NEPCO signed a letter of intent with Noble Energy to research the possibility of supplying its power stations with around 300 million cubic feet of gas from the Mediterranean field off the coast of Haifa.

The Arab Potash Company and the Jordan Bromine Company have also signed deals with Noble Energy in 2014 to import 2 billion cubic metres of natural gas from Israel.

NEPCO's deal with Noble Energy was a matter of hot debate inside Parliament and at other platforms, with many MPs and activists expressing their rejection of importing natural gas from Israel. 

In February this year, the 17th Lower House held a special meeting with the government to discuss the intended gas deal with Noble Energy. The session saw many MPs call on the government to shy from importing the Israeli gas, citing the frequent Israeli crimes against the Palestinian people.

At the time, the government left it unclear whether it had annulled the transaction with Noble Energy to buy natural gas from Israel.

In 2015, former prime minister Abdullah Ensour announced that talks were put on hold “until the US company settles its ongoing legal dispute with Israel”.

The development was announced against the backdrop of a decision by Israeli anti-trust commissioner David Gilo, who announced that he was rescinding an agreement reached with Noble Energy and Delek Group in March that would have allowed the two companies to retain majority stakes in Israel’s two biggest gas fields, Tamar and Leviathan.

In August this year, activists said they would sue the government over its gas deal with Israel, which they said would hurt the Kingdom’s economy. 

“The government prefers to support the terrorist Israeli entity with billions of dollars through the deal instead of investing in renewable energy projects and creating jobs for Jordanians who suffer from high unemployment rates,” said the Jordanian National Campaign Against the Gas Agreement with the Zionist Entity.

 

In a statement on its Facebook page, the group said it had formed a legal team in cooperation with the Jordan Bar Association to file a lawsuit against the government. 

up
132 users have voted.

Add new comment

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
13 + 3 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.

Newsletter

Get top stories and blog posts emailed to you each day.