by Mohammad Ghazal | Oct 01, 2014

AMMAN — Jordan’s first shale oil-fuelled power plant will be operational at the end of 2018, officials said.

The facility is expected to slash the country’s energy bill by $500 million annually as the electricity it will produce will be bought at half the current price, officials said Wednesday.

The $2.2 billion plant, which will have a total capacity of 470 megawatts (MW), accounting for some 15 per cent of Jordan’s current overall electricity capacity of 3,200MW, will utilise Jordan’s vast reserves of oil shale estimated at more than 70 billion tonnes, Minister of Energy and Mineral Resources Mohammad Hamed said at a press conference after signing a power purchase agreement with the consortium that will build the power plant, Enefit (Eesti Energia AS), YTL Power International Berhad and Near East Investments Limited. The plant will be built on build, own and operate basis.

Under the 30-year agreement, Enefit will sell each kilowatt to the government at about $0.107, which is much less than the current costs of using diesel and heavy fuel to generate electricity, Andres Anijalg, project director for Enefit Jordan, told The Jordan Times after the signing ceremony, which was attended by Prime Minister Abdullah Ensour.

Currently, each kilowatt generated by burning diesel or heavy fuel costs around JD0.15, which is equivalent to $0.21.

Enefit will finance the plant via loans from the Bank of China and the Industrial and Commercial Bank of China with the support of China Export and Credit Insurance Corp., said Anijalg.

“We are also in discussions with an international bank and we will soon contact local banks to secure more loans for the project,” said Anijalg.

According to Hamed, the project will directly create 3,000 jobs during the construction phase and 700 jobs for ongoing operations.

“The project will greatly help in Jordan’s efforts to reduce energy imports from 97 per cent of its needs currently to 60 per cent by 2020,” said the minister, adding that the plant is the first of its kind in the region.

It will play a key role in reducing the losses of the National Electric Power Company (NECPO), which are expected to reach JD4.7 billion by the end of this year, said Hamed.

Stressing the importance of the deal, Abdul Fattah Daradkeh, director general of NEPCO, said the plant will consume about 10 million tonnes of oil shale annually and will pay the government JD1.5 for each tonne.

In his remarks at the signing ceremony, the premier stressed the importance of the deal, which he said will help Jordan rely on local resources of energy, thus addressing one of the main challenges the country is facing.

“Enefit also has plans to produce oil from oil shale. This is a reputable company and we will provide all support and pledge to remove any obstacles to facilitate its work,” said Ensour.