Despite weeks of negotiations, Amman and Cairo have yet to reach an agreement on resuming natural gas supplies to Jordan, a senior energy official has said.

According to Minister of Energy and Mineral Resources Khaled Toukan, talks between Jordan and Egypt are ongoing following an April 27 attack in Al Arish disrupted supplies – the second attack on the Arab Gas Pipeline in less than three months.

In a statement issued through the Egyptian press on Thursday, Cairo’s ministry of oil indicated that the hold-up in resuming gas supplies to the Kingdom was over gas quantities rather than higher prices, which have become a stipulation in resuming supplies to the Kingdom.

In a phone interview on Thursday, Toukan declined to elaborate on the nature of the talks, adding only that the government was reviewing an Egyptian request.

Earlier this month, Egypt proposed a staggered price increase putting an end to a favourable pricing deal under which Amman received natural gas at less than half of the market price.

It is believed that under the proposal, a certain percentage of the previous gas supply, which Jordan relies on for 80 per cent of its electricity generation needs, would be supplied at favourable prices, with the remaining sold at international rates.

Prior to the attack, Jordan received 150 million cubic feet of natural gas each day from Egypt – half of the amount it received in 2009 – and well below the 240 million cubic metres stipulated in the 12-year agreement, which runs through 2016.

Jordanian energy officials now hope to resume supplies to an “urgent” 200 million cubic metres per day in order to alleviate pressure on the energy sector.

Last month’s attack has forced the country’s power plants onto their heavy oil and diesel reserves, costing Jordan some $3 million per day and forcing authorities in Amman to explore liquefied gas imports as a long-term alternative.

The Kingdom imports 96 per cent of its energy sources at a cost of around one-fifth of the gross domestic product.

 

Source: Jordan Times