Resumption of Egyptian gas supplies ‘unclear’

It is “unclear” when Egyptian gas supplies to Jordan will resume, energy officials said on Monday, amidst growing concerns over the viability of the Kingdom’s main energy source. According to the Ministry of Energy and Mineral Resources, energy officials in Cairo have indicated that the resumption of pumping hinges on the progress of ongoing repairs on the Arab Gas Pipeline, which was damaged late last month in what marked the ninth act of sabotage this year. As of yesterday, the timing of the return of natural gas supplies - the Kingdom’s main energy source - was “unclear”, according to a ministry source. Sources at GASCO, one of the two Egyptian firms that oversee the 400-kilometre pipeline, which also supplies Israel, confirmed that repairs are “progressing”. Based on previous acts of sabotage, it may take up to two weeks before full pumping to the Kingdom can resume, according to the firm. It was also unclear whether supplies will return to the pre-attack levels of 150 million cubic feet per day, well below the 300 million cubic feet required by the Kingdom’s power plants to sustain electricity generation. Under an amended gas agreement between Cairo and Amman, which raised prices from less than $2 to over $6 per 1,000 cubic feet, Egypt is to boost supply levels to 220 million cubic feet by early next year. The agreement, which Cairo has yet to ratify, also stipulates that Egypt is to provide additional gas quantities to Jordan as compensation should a disruption in supply occur. The November 28 explosion marked the latest setback for the Kingdom’s energy sector, which relies on Egyptian gas for over 80 per cent of its electricity needs. The Sinai blast - the third act of sabotage on the pipeline in less than a month - took place amidst assurances from Cairo that the recent arrest of several jihadists allegedly behind the series of attacks combined with an increased security presence in the peninsula would safeguard supplies. Multiple disruptions in gas supplies have ballooned the budget deficit and are pushing the national energy bill to record highs, over JD1 billion. In response to the blast, the ministry has expedited efforts to secure alternative energy sources, including importing natural gas from Iraq and liquid gas from the Gulf, with plans in place to construct an offshore gas terminal in the Red Sea port of Aqaba by 2013. Despite the renewed push for alternative energy sources, officials say it will take over two years for any new agreement to come into effect due to infrastructure requirements. According to industry experts, securing alternative energy sources has become an issue of national security for Jordan, which currently imports 98 per cent of its energy needs at a cost of 23 per cent of the gross domestic product.