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‘Using natural gas to generate power saves Jordan JD1m per day'

By Khetam Malkawi - Dec 01,2015 - Last updated at Dec 01,2015

An aerial view of the Sheikh Sabah Al Ahmad Terminal in Aqaba during its construction

AQABA — Electricity generation using natural gas rather than crude oil saves Jordan JD1 million per day at the current oil price of $41.60 per barrel, according to Ghassan Ghanem, CEO of the Aqaba Development Corporation.

In a recent meeting with journalists, Ghanem underscored the importance of the liquefied natural gas (LNG) terminal in Aqaba, noting that if the price of crude oil rose to its mid-2014 level at $100 per barrel, generating electricity using LNG would save Jordan JD3 million per day.

In July 2015, His Majesty King Abdullah inaugurated the Sheikh Sabah Al Ahmad Terminal in Aqaba, 330km south of Amman, used to pump LNG to electricity-generating stations across the Kingdom. 

According to Ghanem, using natural gas rather than crude oil to generate electricity not only saves the government millions of dinars, but it is also better for the environment.

In another major milestone for the terminal, Jordan has started exporting gas to Egypt, which had been a major source for the Kingdom’s gas imports until three years ago, he said.

“We started exporting gas to Egypt two months ago,” Ghanem noted, adding that this helps make up the cost of renting the ship used for storage and regasification of LNG.

The ship can hold up to 160,000 million cubic metres of LNG.

Although Egypt discovered a massive gas field in the Mediterranean Sea in August, it will not start producing gas for four years, according to Ghanem.

He said almost 60 per cent of the LNG that Jordan imports comes from Nigeria, while 30 per cent comes from South America and 10 per cent from Qatar.

Under a contract between the National Electric Power Company (NEPCO) and energy firm Shell, the Anglo-Dutch company agreed to supply NEPCO with 15 LNG shipments during 2015 plus four shipments from the spot market. 

With the new supplies, the cost of electricity generation has dropped by 25 to 30 per cent.

The network of energy terminals includes a liquefied petroleum gas (LPG) port and a specialised port dedicated to marine services for LNG ships.

Building the LPG port, Ghanem said, was another investment that contributed to reducing prices of gas cylinders over the past few months.

The price of a gas cylinder fell from JD10 to JD7 before rising to JD7.5 on November 30. 

Before establishing the LPG port, “we used to rent ports in other countries", the CEO noted, adding that the time required to handle gas shipments has also decreased. 

Ghanem said there is also a project to establish a port for coal and oil, which could save Jordan $20 million annually. 

According to the official, in 2013 and 2014, the proportion of energy that Jordan generated from coal constituted 4.5 per cent of the total energy consumed.

 

There will be also another port for miscellaneous liquids that will be used once prices of oil derivatives are liberated, he said.

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