You are here

Kingdom likely to lead region on shale oil production

By Mohammad Ghazal - Apr 14,2014 - Last updated at Apr 14,2014

DEAD SEA — A series of multibillion projects to generate oil from oil shale and build oil shale-fuelled electricity plants will start operation in the next few years, relieving the country’s rising energy bill that accounts for 20 per cent of the country’s gross domestic product, officials said Monday.

Jordan, which signed several agreements and memoranda of understanding with key international companies with decades-long experience in oil shale to utilise its 70-billion-tonne reserve of oil shale, will be one of the countries contributing to producing oil from oil shale, especially since some 5.7 million barrels of oil are expected to be produced from oil shale per day by 2035, they said.

One of the projects is by Enefit, a joint Estonian-Malaysian consortium, which is expected to produce 553 megawatts of power through an oil shale-fuelled power plant. The $2 billion power plant is expected to be operational in 2017.

“The government is currently in the process of negotiating the price to buy electricity from the plant and connect it to the national grid,” Minister of Energy and Mineral Resources Mohammad Hamed told The Jordan Times Monday on the sidelines of the International Oil Shale Symposium 2014.

“We expect to give Enefit our response by the end of next week,” said the minister.

Sandor Liive, CEO of Enefit, expressed hope that the government will speed up the process.

“Agreeing on the price is very important. Once we agree with the government on the price, a power purchase agreement [PPA] will be signed after which construction of the power plant will start. We cannot do anything without signing this agreement. We have already selected the contractor to build the plant and secured financing. What is left is signing the PPA,” Liive told during the event, which attracted officials and representatives in the field from several countries.

Another major agreement to produce oil from oil shale is one with the Jordan Oil Shale Co., which is wholly owned by Shell, said the minister, adding that the company is expected to continue the assessment phase for three years. After that, it will decide on whether to proceed with the development phases, he said.

The company will carry out an experiment by the end of this year to produce oil from oil shale, he added.

Speaking at the event, Musa Zyoud, director general of the Natural Resources Authority, said a group of Chinese, UAE and Jordanian companies showed interest in building a 900-megawatt oil shale-fuelled power plant, adding that it is expected to be operational in 2017.

In terms of producing oil from oil shale, Zyoud said the Karak International Oil company is scheduled to start producing 15,000 barrels per day (bpd) of oil from oil shale in 2017 and will go up to 50,000bpd in 2020.

“The government is keen on supporting all projects in this field,” said Zyoud, adding that Jordan is home to about 70 billion metric tonnes of oil shale, making the Kingdom the fourth largest country in the world in terms of oil shale reserves.

Noting that Jordan will be one of the pioneering and leading countries in the region in terms of implementing oil shale projects, Hisham Khatib, deputy chairman of the World Energy Council, said production of oil globally stands at about 80 million bpd at present. However, the world’s consumption of oil reached 105 million bpd in 2013 and conventional oil production cannot be increased to more than 85 million bpd, he said.

“Oil shale will be one of the main resources that will be used for producing oil,” he said. 

The challenges and opportunities in Jordan’s oil shale drive were scheduled to be discussed during the two-day event. 

up
155 users have voted.

Newsletter

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