Jordan to import more fuel oil due to pipeline disruption

Jordan Petroleum Refinery Co, the country’s sole refinery, is importing more fuel oil and gasoil for power generation, as continued attacks on a pipeline running through Egypt, Israel and Jordan disrupt natural gas supply, industry sources said on Tuesday.

The refiner is expected to buy all 210,000 tonnes of fuel oil it sought via tender in mid-March from various sellers, though details will only be available after the tender is awarded on Wednesday, a source familiar with the matter said.

In addition to fuel oil, the refiner is also seeking 500,000 tonnes of gasoil, with the tender closing at the end of April.

The increased demand for fuel oil that meets Jordan’s power utility specifications has prompted at least one seller to pull volumes from East Asia, a rare move as fuel oil normally flows from the Middle East to the East.

Sahara Energy International has arranged a ship to move 80,000 tonnes of fuel oil from Singapore to Aqaba around April 16, a shipping report showed.

“Their specifications, which require very low metal content, make it difficult to source for supplies,” a trader said.

Jordan’s monthly fuel oil import requirement before the pipeline explosions had been just the occasional 40,000 tonnes to meet its summer power generation demand, the same trader added.

The country also normally exports high-sulphur fuel oil from its Aqaba port, but the volumes actually originate from Iraq, traders said.

“Jordan does not export its own fuel oil, they lease out tankage to Iraqi exporters instead. But Iraqi fuel oil does not meet the power utilities’ specifications, that’s why they get exported,” another trader said.

An explosion hit the Egyptian pipeline carrying gas to Israel and Jordan on Monday for the 14th time since the uprising against President Hosni Mubarak began last year.

The installation is run by Gasco, a subsidiary of Egypt’s national gas company EGAS, and has been shut since Feb. 5 after an explosion.

The disruption of natural gas supplies has not only affected Jordan but its neighbour Israel as well. The Jewish state had sought up to a million tonnes of gasoil on the international market in November.

Source: Reuters


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