Into the limelight: Reducing energy dependence by tapping into oil shale reserves

Despite bordering oil and gas powerhouses Saudi Arabia and Iraq, Jordan has traditionally been regarded as having little in the way of energy resources of its own, and the country currently remains overwhelmingly reliant on imports. This reliance has in recent years been the source of growing political, economic and strategic problems for the country, and has seen the government cut back on fuel subsidies in order to tackle its deficit. Problems appear set to get worse before they get better, with the government planning to raise electricity prices and considering a range of other measures to curb consumption. However, in the medium to long term, Jordan is on track to radically reduce its energy import dependence as the country moves to tap its vast oil shale reserves and steps up efforts to explore for conventional resources, with several major international oil companies recently joining the search. The country also plans to reduce its energy import dependence through the use of renewables, a segment that has seen a surge of interest thanks to a recent change in the law, as well as through construction of the kingdom’s first nuclear power plant. Jordan is also moving to diversify its energy imports to mitigate the threat of supply disruptions, which it has faced over the past two years.

CONSUMPTION & IMPORTS: Primary energy consumption stood at approximately 7.46m tonnes of oil equivalent (toe) in 2011 according to data from the Ministry of Energy and Mineral Resources (MEMR), or 1193 kg of oil equivalent on a per capita basis. About 7m toe of consumption was supplied by imports, according to the MEMR. The transportation sector is the largest consumer of energy in the kingdom, accounting for some 41% of total consumption in 2011. Next in line are households (23%), followed by industry (20%), and services and other sectors (16%). Imports largely take the form of oil and natural gas. The bulk of the kingdom’s crude oil imports – an average of 100,000 barrels per day (bpd) – come from neighbouring Saudi Arabia. The kingdom also imports around 10,000 bpd from Iraq, which the latter has agreed to increase to 15,000 bpd at discounted prices. In January 2013 the two countries agreed to extend an oil pipeline from Iraq across Jordan to Aqaba. The 1mbpd-capacity pipeline will allow Iraq to export oil via Aqaba and will also facilitate exports to Jordan, which are currently trucked into the kingdom.

IRANIAN OFFER: In November 2012, Iran reportedly offered to barter oil at preferential prices in return for Jordanian chemical and industrial products, as well as reduced restrictions on the entry of Iranian pilgrims to the kingdom (the development was widely reported as on offer to provide Jordan with “free” oil but the Iranian embassy in Amman issued a clarification that this was not the case). The offer comes at a time when Iran is having difficulty selling much of the oil it produces due to US and European sanctions and pressure, which has led it to shut down some of its production, damaging the long-term prospects for its wells. The US – to which Jordan has traditionally been allied – is most likely to pressure Amman to reject any such deal.

MEMR figures show that Jordan imported 3.19m tonnes of crude oil in 2011, down slightly from 3.48m tonnes in 2010, in line with falls in previous years (imports stood at 3.8m tonnes in 2008). However, imports of diesel and fuel oil increased sharply, from 670,000 tonnes to 1.36m tonnes, and from 307,000 tonnes to 674,000 tonnes, respectively. Imports of liquefied petroleum gas and gasoline also rose, from 219,000 tonnes to 288,000 tonnes and from 400,000 tonnes to 540,000 tonnes, respectively.

VULNERABILITY TO SHOCK: Jordan’s gas supplies come from Egypt. The two countries signed a gas supply deal in 2003, at a time when energy prices in general were low, at a price of under $2 per 1000 cu feet. With energy prices having risen significantly from 2003 onwards, Egypt has repeatedly called for a review of the agreement, and in December 2011 the two countries signed a revised deal that increased the price to over $6 per 1000 cu feet, to be reviewed every two years.

However, reliability of supply has been a concern in addition to pricing. Normal gas supplies with Egypt were interrupted between February 2011 and mid-2012 as a result of a number of sabotage and bomb attacks in the Sinai Peninsula on a section of the pipeline that transports gas to Jordan and Israel, following the overthrow of former Egyptian President Hosni Mubarak and the ensuing deterioration of security.

SUPPLY DROPS: In addition to the repeated halt in supplies as a result of the bombings, Egypt also voluntarily reduced supply, saying it needed to carry out maintenance and address rising domestic consumption, though there were also claims that the cuts were in part politically motivated. The interruption to supply saw gas imports from Egypt drop 65% year-on-year to 2011, to 28.5bn cu feet. Average import levels fell to around 40m cu feet of gas a day in 2012, compared to contracted levels of 250m cu feet. However, at the time of writing the situation appeared to have improved. In early January 2013, the government announced that Egyptian gas supplies had returned to close-to-normal levels of around 240m cu feet a day from an average of 40m cu feet in 2012 for the first time since the attacks began, following a drop-off in the number of attacks and recent progress in the negotiation of the 10-year gas agreement between Cairo and Amman.

Nevertheless, the authorities are taking steps to diversify gas supply through the construction of liquefied natural gas (LNG) import infrastructure (see energy policy analysis). The country also purchases electricity from Syria and Egypt, with which it has interconnections. Electricity imports rose to around 1738 GWh in 2011, up some 159% on 2010.

EXPLORATION & PRODUCTION: Jordan is a comparatively under-explored country in terms of oil and gas, and production levels are low. Domestic gas production in 2011 stood at 6.4bn cu feet, or 133,900 toe, according to MEMR figures. Meanwhile, domestic oil production was negligible, at 900 tonnes, all of it coming from the small Hamza field.

However, the authorities are making efforts to increase exploration activity, which they hope will lead to new discoveries and significantly boost production, arguing that Jordan is becoming an ever-more attractive location for exploration. “The prospectivity of Jordan is growing and risks are falling with changes in the sector such as new technology,” said Hazim Ramini, director for petroleum and oil shale at the National Resources Authority (NRA), which is responsible for licensing and monitoring oil and gas (and mining) exploration activity in the kingdom.

“In total, 97% of all energy needs in Jordan are imported, which comes at a significant cost to the state,” Thomas Meijssen, general manager, at Jordan Oil Shale Company (JOSCO), a Shell subsidiary, told OBG. “Large oil shale deposits in Jordan offer the potential to significantly increase domestic energy resources and reduce the country’s reliance on energy imports. We are optimistic that Jordanian oil shale can be produced at a commercial level, leading to further progress and investment in the country’s domestic energy industry,” he said. Interest in Jordan’s oil shale reserves is also having knock-on effects on other parts of the sector. “As part of Shell’s memorandum of understanding (MoU), the company is studying data for other conventional and tight/shale oil opportunities,” Meijssen added, explaining that this research has led to Shell’s interest the Azraq and Sirhan blocks.

PRODUCTION SHARING AGREEMENTS: Oil and gas in the kingdom is produced under production sharing agreements (PSAs) between the government and the concessionaire for each oil and gas block, of which Jordan is divided into nine. For oil production, the government takes a share of 40% of output for concessions producing less than 10,000 bpd, which rises incrementally to 70% for concessions producing over 200,000 bpd. At the time of writing, the only PSA in place was for the 7000-sq-km Risha block, which as of late 2012 was producing around 15m cu feet of gas per day. The concession holder is the government-owned oil and gas firm National Petroleum Company (NPC), which manages existing production in the block under a 50-year concession that began in 1996. According to the NPC, output at the Risha field is expected to increase to 20m cu feet per day in 2013.

FOREIGN ENTERPRISE: In 2010, BP entered into the concession through a strategic partnership with NPC and became responsible for further exploration in the block. Under the agreement, BP is to invest at least $237m in exploring Risha over a period of up to four years. BP conducted one of the region’s largest-ever land seismic surveys in 2011, covering a 5000-sq-km area, which yielded highly positive results. The company began drilling its first well in the block in June 2012, and the government is banking on it making sizeable discoveries, envisaging production at the field reaching around 330m cu feet.

NPC is also in negotiations with the NRA regarding a PSA for the East Safawi block (which is adjacent to Risha), having won a bid round for the block in late 2012. AIM-listed Irish oil and gas firm Petrel Resources previously had a concession for the block but withdrew in 2010. Nabeel Rabadi, the studies, planning and marketing manager of NPC, told OBG that the first stage under the PSA will be a three-year exploration phase, for which the firm has budgeted $7m. Rabadi is optimistic: “Safawi is an extension of Risha, so we can expect some gas in the eastern part.”

In March 2013, South Korean firm Korea Global Energy Corporation (KGEC) won approval from the Jordanian Cabinet for a PSA for the 6189-sq-km Dead Sea/Wadi Araba block, having previously signed a MoU with the government regarding a study of the block in February 2011. US firm Trans Global previously held the concession, but left it following a dispute with the authorities over its decision to announce it had discovered commercially exploitable quantities of oil in the block, a claim which the government said was inaccurate. As per the US firm’s findings, the block contains “probable” or P2 reserves of 1.15bn barrels of oil and up to 7bn barrels in “estimated” or P3 reserves. Ramini also told OBG that Thyssen Petroleum, which has an MoU for evaluation of the North Highlands block, is planning on entering a PSA for the block soon.

In another recent development, also in December 2012, international energy major Royal Dutch Shell, which has an oil shale concession in place through its subsidiary JOSCO, signed an MoU for the sub-surface study of the Azraq and Sirhan blocks, which are 9665 sq km and 10,286 sq km in size, respectively. The deal represents the second entry of Shell into the kingdom’s conventional oil and gas sector, alongside BP.

“The additional MoU signing by Shell is a positive sign, especially in light of concerns related to the Arab spring,” said Ramini. “Shell signed an oil shale concession agreement in 2009, and has been operating for the past four years as JOSCO. This is another opportunity for Shell now as they have signed an MoU, which is another indication of how Jordan’s prospectivity has changed.”

MoUs are also at present in place for all other blocks except the South Jordan block and the West Safawi block. In November 2012, the NRA opened a bidding round for West Safawi, initially planned to run until January 15, 2013 but subsequently extended to March 1, 2013, as well as for the enhancement of the Hamza oil field, the only currently producing oil field in the country. Most recently, a bidding round for the South Jordan block was also opened in mid-April 2013, with a closing date of June 20, 2013.

FUEL PRODUCTION: The sole refinery in Jordan is owned by the Jordan Petroleum Refinery Company (JPRC), a publicly listed firm. The largest shareholder in JPRC is the Social Security Corporation (SSC), with a stake of 20.4%, followed by the Islamic Development Bank, with 6.25%; the bulk of the firm’s shares – 60.6% – are owned by individual private investors.

Total production of oil products at the refinery stood at 3.16m tonnes in 2011, according to the MEMR, a figure that has been steadily falling in recent years, down from 3.79m tonnes in 2007. Meanwhile, national consumption stood at around 6.08m tonnes in 2011, up a sharp 24% on 2010 figures due to rises in fuel oil consumption to compensate for the interruption of natural gas supply from Egypt.

“Jordan has had an unusual energy mix in the past few years particularly because diesel consumption suddenly more than doubled due to the loss of Egyptian natural gas,” Abdel Karim Alawin, CEO of the JPRC, told OBG. “Moving forward a more balanced and suitable energy mix must be established. The addition of potential local natural gas supplies will certainly contribute to correcting the current energy mix.”

The company has long been seeking to expand its production capacity – the so-called fourth expansion project – but this has been subject to delays. In November 2012 the firm’s shareholders agreed to increase its capital, to JD40m ($56m) and the company is currently seeking a strategic partner to help it with the expansion, though this is being hindered in part by unpaid bills, in particular from electricity companies.

“The refinery is owed a lot of money,” noted Saleem Nabulsi, business development manager at Chemical Supplies & Services Company, which counts JPRC as a client. “The first step will be to get that money and then further increase their capital. They may not go for a full expansion but may instead choose to replace and improve equipment; they have already replaced three gas compressors.” Modernising the firm’s equipment and methods is necessary to reduce prices, he said, “Currently it costs them a lot of money to refine products because the refinery and its processes are old.”

FUEL DISTRIBUTION: There were 441 petrol stations in the kingdom at the end of 2011, rising to around 450 in late-2012. The fuel retail market is fragmented, with the top three retail groups owning around 8% of stations in the kingdom as of 2010.

Local petrol station company Manaseer Oil and Gas, which was established in 2001 and is part of the Manaseer Group conglomerate owned by Jordanian businessman Ziad Al Manaseer, was the largest operator in terms of outlets, with 27 stations (around 6% of the market) as of December 2012. Next largest was France’s Total, which entered the market in 2009, with 23. Gulf also operates a significant network in the kingdom, though the company reportedly has plans to sell its stations in Jordan. The JPRC also owns 10 petrol stations.

The remainder of outlets either belong to small groups or are independents. The large groups are more dominant in terms of sales; according to Manaseer, the company has a market share of about 22% in terms of the volume of fuel sold (including around 17.8% of the bulk fuel market), the largest of any firm in the sector.

LIBERALISATION PLANS: The price of fuel is fixed by the government, meaning that petrol stations cannot currently compete on cost. However, plans to liberalise the sector will eventually remove such restrictions. Under the plans, the JPRC has until late 2015 to find a strategic partner for its expansion.

If successful, the refinery will see its monopoly on fuels production extended for a further three years. The price of fuel will remain regulated by the government according to global prices during this period; however after that, the market will be opened to competition, including imports, though prices will be capped for an indeterminate period. Industry players say the transition period is necessary if the refinery is to survive.

In November, as part of an initial step towards eventual deregulation, the distribution market was restructured, with the government signing agreements with Manaseer and Total allowing them to distribute refined products to petrol stations, in addition to the JPRC. Under the reforms, petrol stations in the kingdom have been divided into three separate groups of equal size, with each of the three firms – known as oil marketing companies – being allocated one of the groups as its distribution market, for a three-year period. New outlets will be able to choose which marketing group they wish to join, while existing stations will be allowed to change supplier at the end of the period.

ELECTRICITY: Electricity generation capacity stood at around 3050 MW as of mid-2012. MEMR data shows that actual electricity generation stood at 14,647 GWh in 2011. Consumption stood at 13,535 GWh, putting per capita consumption at 2166 KWh.

According to MEMR data, the largest consumer of electricity in 2011 by segment was households, accounting for 41%, followed by industry on 25.5%, commercial institutions on 16.8%, the water pumping segment on 14.3% and street-lighting on 2.5%. The MEMR expects demand to grow by approximately 7.4% annually in the period between 2008 and 2020, reaching 5770 MW by the end of that time (see analysis).

POWER PLAYERS: The MEMR is responsible for overall policy and planning for the electricity sector. The main regulatory body is the Electricity Sector Regulatory Commission, whose main duties are issuing licences to generation, transmission and distribution companies, setting tariffs and dispute resolution.

The Central Electric Generating Company is the largest generation company; it was formerly governmentowned but was semi-privatised in 2007, when the Enara consortium (which is 90%-owned by Saudi Arabia’s ACWA Power) acquired a 51% stake in the firm; a further 9% was acquired by Jordan’s Social Security Corporation (SSC), while the remaining 40% remains in the hands of the government. The company has a generation capacity of 1687 MW, representing around 55% of the kingdom’s total installed generation capacity.

The second-largest generating firm is Samra Electric Power Generation Company, which remains wholly government owned and had an installed generation capacity of 742 MW in 2011. Samra is currently in the process of building a new 146-MW simple-cycle power plant in the northern city of Zarqa, due to enter into service in June 2013, and also plans to expand its Samra III power plant from 285 MW of capacity to 428 MW by 2015.

Two foreign-backed entirely private companies also generate electricity for the national grid. These are AES Jordan, a joint venture between US firm AES and Mitsui of Japan, and Al Qatraneh Electric Power Company, a joint venture between Korea Electric Power Corporation (KEPCO) and Xenel of Saudi Arabia. AES Jordan operates the 370-MW East Amman power plant, which was the first independent power project to be launched in the kingdom when it entered into operation in 2009 at a cost of $300m, while Xenel operates a 373-MW project launched at the end of 2010.

AES is in the process of building another plant, the 250-MW Manakheer facility east of Amman, at a cost of $350m, due to be completed in 2014. KEPCO and Mitsui are also expanding their generation capacity via another joint venture (Amman Asia Power Company, which also includes Wartsila), with plans for construction of a 573-MW tri-fuel facility – the world’s largest tri-fuel power plant – due to be fully operational by September 2014. Renewables and oil shale-fired plants are set to boost capacity in coming years (see analyses).

The authorities are also implementing an electrical appliance energy-labelling programme, with help from the UN Development Programme that will see all appliances affixed with labels rating their energy efficiency, with further plans to impose mandatory efficiency standards on all appliances from the end of 2013.

TRANSMISSION & DISTRIBUTION: The construction and operation of Jordan’s transmission network is the responsibility of the National Electric Power Company (NEPCO), which is 100% state-owned. As of late 2012 NEPCO had built up a JD2.6bn ($3.66bn) budget deficit due to the gap between the cost of purchasing electricity from generation companies and the lower price at which it sells to distribution firms (fixed by law).

Distribution is split between three regional firms. Jordan Electric Power Company (JEPCO) is responsible for Amman, Zarqa, Madaba and Balqa governates, excluding the Central Jordan Valley area, and accounts for around two-thirds of electricity consumers in the country. The company is listed on the Amman Stock Exchange; the only shareholder with a holding of more than 10% in the firm is the SSC, which owns a at 17% stake.

Irbid District Electric Company (IDECO) is responsible for Irbid, Mafraq, Jerash and Ajloun governates (not including the northern Jordan Valley and eastern parts of Jordan), covering an area of around 23,000 sq km. The firm was privatised in 2008 and the largest shareholder is now the Kingdom Electricity Company (KEC), which has a 55% share in IDECO through Electricity Distribution Company (EDCO); Irbid municipality also owns an 8% stake in the firm, while several other municipalities in the area it covers also own smaller stakes.

EDCO is responsible for all areas not covered by JEPCO and IDECO, amounting to around 55% of the kingdom’s territory. EDCO was also privatised in 2007 and is owned by the KEC. The KEC is controlled by the SSC, which acquired a 51% stake in the company in 2011; other shareholders include Jordan Kuwait Bank and the Kuwait-based Privatisation Holding Company.

RENEWABLES & ENERGY EFFICIENCY: Renewables accounted for just 1.7% of energy consumption in the kingdom in 2011. More or less all of this came from solar generation, which stood at around 130,000 toe that year, according to MEMR data, a figure that had barely increased over five years (standing at 118,000 toe in 2007). However, renewables generation is set to increase significantly from 2014 onwards as a result of factors such as the new Renewable Energy and Energy Efficiency Law (REEL) (see analysis).

REEL entails major changes as regards the use of renewables by electricity consumers, most notably the right of customers to produce up to 100% of their electricity consumption with their own devices (in practice mainly solar panels). Initially, Jordanians were allowed to produce a maximum of 25% of their electricity consumption from renewables. Industry figures believe the authorities will soon raise the 100% cap, allowing households to even sell excess electricity to the grid.

“The government is being flexible and we moved from 25% to 100% in less than a year, thanks in part to lobbying from energy industry association Edama and the MEMR’s response,” said Hanna Zaghloul, CEO of local firm Kawar Energy. “The limit will be raised further, but it takes time as the government is locked into agreements with the electricity distribution companies, and raising the limit will definitely affect their cash flow.”

The kingdom has taken additional measures to strengthen the use of renewables and energy efficiency and to support the implementation of the law since its passage. In December 2012, the Electricity Regulatory Commission published an indicative list of tariffs it will pay for electricity generated by renewables projects under power purchase agreements, which were not previously in place. These are set at JD0.135 ($0.19) per KWh for concentrated solar power projects, JD0.12 ($0.17) for photovoltaic (PV)-generated electricity, JD0.085 ($0.12) for wind-generated electricity, JD0.09 ($0.13) for electricity generated from biomass from waste and JD0.06 ($0.08) for biogas-generated electricity. According to Walid R Shahin, a director at the National Energy Research Centre, the tariffs should generate interest as investors will be able to calculate how much they will earn in return for their investment.

“In the medium term renewables will likely not be more than 5% of the total energy mix,” Abdul Rahman Shehadeh, CEO of Philadelphia Solar, a clean-energy solutions firm, told OBG. “The hope is that in the long run they could contribute as much as 20%, but this will require a great deal of effort,” he added. Notwithstanding, Shehadeh notes the strong position of the renewable energy segment in the kingdom following the mandate for growth provided under the REEL, which has opened the way for foreign interest, especially from the Gulf, in taking forward large solar projects.

SOLAR & WIND: Although current government plans are targeting more wind than solar generation, some industry figures argue that solar is particularly promising in the Jordanian context, given the country’s climate. “The country has a high rate of irradiation – one of the best in the world. Solar is thus the best-suited renewable energy for Jordan, both as regards thermal and electricity,” Shahin told OBG. “Jordan’s weather is very favourable for solar,” agreed Zaghloul. “A solar plant that generates 1 MW in southern Germany can generate twice that in Jordan,” he said, adding that levels of dust, haze and humidity, which can all cause problems for the technology, are also all comparatively low.

“It will be important for large energy consumers, such as the banks, factories and government buildings to fully integrate with the available solar technologies,” George Hanania, general manager at Hanania, a solar hot water firm, told OBG. “Wholesale installations of PV panels onto these buildings will instantly bring huge savings in the respective entities’ energy bill,” he added.

Wind energy also has potential, but faces some issues. “There are some promising locations and it is a cheaper and very mature technology; it also generates at night, unlike solar. However, there are some questions about whether the national grid can handle electricity handled by wind, as it is not stable.” said Shahin.

PROJECTS: Foreign donors are been supporting the development of solar power. In July 2012 the World Bank provided Jordan with a $112m loan for the construction of a 100-MW concentrated solar power plant. In late 2012, the then minister of energy and mineral resources, Alaa Batayneh, told local press that $300m of a $5bn grant from the GCC to be released over five years would go towards developing two renewables projects – one wind and one solar – with a combined capacity of between 125 MW and 175 MW (see analysis).

While there are several renewable energy projects in the pipeline, the national grid does not at present have the capacity to take on the power output of these projects, Samir Kattan, CEO of ASTRACO, a local engineering firm, told OBG. The government is aiming to have a “green corridor” in place by 2015 to enable the grid to handle all renewable energy projects.

In the meantime, a decision in September 2012 to make the installation of solar-powered water heaters compulsory in all new houses larger than 820 sq feet, as well as in apartments larger than 492 sq feet and offices larger than 328 sq feet. The measure follows a decline in the use of such devices, to 11% of apartments, houses and offices from 14% three years previously, and will come in to effect in April 2013. The authorities also approved amended regulations allowing customers to sell up to 5 MW of electricity back to the grid, an improvement on the maximum of 1 MW previously. Regulations allowing net metering were also approved following the passage of the law and the first system was successfully installed in November 2012.

NUCLEAR: In order to further diversify its electricity generation capacity, the kingdom also intends to invest in civilian nuclear energy and is arranging for the construction of its first nuclear power plant.

Two bidders are currently in discussions with the authorities, French-Japanese consortium Atmea and Russia’s AtomStroy Export. They are both proposing light-water reactors with a generation capacity of in the region of 1000 MW each.

The authorities are also studying potential sites for the project. The Jordan Atomic Energy Commission (JAEC) reportedly selected a preferred site in Mafraq, north-east of Amman, in February 2012; however, according to Yazan Al Bakhit, economic researcher at the JAEC, a second site area south-east of the city of Zarqa was recently put on the table as well.

A final decision is still to be taken on deciding on one of these two selected sites. The previously selected site near Aqaba has largely been ruled out because of seismicity in the area. A financial feasibility study is being prepared by JAEC and external consultants, and is due to be ready in the first quarter of 2014. The country is also building a 5-MW research reactor near Irbid, which is due to be commissioned in 2015.

The kingdom’s nuclear plans have been met with some scepticism. For example, in November 2012 Dave Thomas, an energy policy researcher at the University of Greenwich in England, told The Jordan Times, a local English-language newspaper, that he believed it was all but “inevitable” that Jordan would abandon its nuclear energy projects because of factors such as high construction costs, the difficulty of raising financing and issues surrounding the licensing and testing of the vendors’ technologies, which in both cases are new. Nevertheless, the authorities say the project is moving ahead, despite some of the criticisms and doubts.

COST CONCERNS: The JAEC’s Al Bakhit told OBG that the cost of generating electricity through nuclear power would be in the region of $0.09 to $0.13 per KWh, which compares favourably to other resources, though he noted that the final figure would depend on a variety of factors that have yet to be finalised.

“The plant is economically feasible,” he said. “As with any mega-project, financing is the biggest challenge facing a nuclear power plant. A range of options will be considered, i.e. unconventional financing sources, and arrangements put in place to facilitate these; we have already approached investors, both locally and from abroad, such as the Gulf countries. It is also likely that the vendor country will be heavily involved in and supportive in the financing of the project,” through an export credit agency, for example.

WATER WORRIES: Another reason for scepticism is the current shortage of water resources in the kingdom; however, the planned plant is expected to use treated sewage water from Amman and Zarqa, following in the steps of the model of the Palo Verde nuclear reactor in the US state of Arizona.

“The Samra Waste Water Treatment Plant, north of Amman, produces 70m cu metres of waste water every year and is expanding to 120m cu metres; the nuclear power plant only needs 25-30m cu metres for each 1000-MW unit per year,” Al Bakhit told OBG. Although water is a challenge, a solution is very much possible as it has been tested and proven in the US, he said.

At the same time, a number of analysts have noted that the light-water technology is not well established, given that just one plant currently uses it. The project also potentially faces political obstacles. Parliament has been critical of it and in May 2012 MPs voted in favour of suspending the nuclear programme until all feasibility studies related to uranium exploration and the nuclear power plant have been completed, financing is secured and the selection of site conforming to international regulations is finalised. The JAEC is currently carrying out these tasks.

Furthermore, in September 2012 King Abdullah II reiterated statements that neighbouring Israel has been working to block the project, though Israel has denied this and asserted that it had helped Jordan with its nuclear development programme by providing the kingdom with geological data.

Despite these obstacles, Al Bakhit told OBG that the country has little choice but to ensure that the project is successful. “Jordan does not have many alternatives. We cannot rely on renewables for the base load, so we have limited choices,” he said.

OUTLOOK: Industry figures are keen to emphasise that no single energy source holds the overall answer to Jordan’s current energy deficit, but that together different new sources being developed can bridge the gap over the medium to long term. “The combination of renewables, oil shale and gas will be what achieves Jordan’s energy independence in the future. Things are moving slowly and the next three years may be quite tough,” Shahin told OBG. “But I am very optimistic that after that the kingdom can overcome its energy crisis.”