Egypt gas deal expected ‘within days’

A LONG-AWAITED natural gas deal between Egypt and Jordan is expected to be finalised within a week, pending approval from Cairo, according to energy officials.

Egyptian and Jordanian officials are days away from signing an amended natural gas agreement which was ratified by the Cabinet late last month, according to Minister of Energy and Mineral Resources Khaled Toukan.

“Constitutionally, everything is set from our part and we are awaiting approval from the Egyptian government,” Toukan told The Jordan Times over the phone on Wednesday.

Once the agreement is signed and ratified, Egypt is to supply Jordan with 150 million cubic feet of natural gas per day, a quantity that is to reach 220 million cubic feet by 2012.

The agreement, which brings to an end a favourable pricing structure under which Amman received gas at prices less than half of the international rate, includes safeguards stipulating penalties should the supply dip below 175 million cubic feet per day.

As part of the revamped deal, starting in 2013, Cairo is to supply Amman with additional gas quantities as compensation for the multiple disruptions in supply caused by five separate acts of sabotage on the Arab Gas Pipeline earlier this year, Toukan added.

Separate attacks on the pipeline in the Sinai Peninsula in February, April and July forced the Kingdom’s power plants on their diesel and heavy oil reserves at a cost of around JD3 million per day.

The disruptions in Egyptian gas supplies, which Jordan relies on for 80 per cent of its electricity generation needs, cost the Kingdom a total of JD637 million in the first half of the year, according to finance ministry estimates.

An increased military presence in the Sinai region, combined with Egyptian authorities’ recent foiling of a sixth sabotage attempt, have assured energy officials in Amman of the supply’s stability.

“We are more confident of recent measures taken by our Egyptian counterparts and are looking forward to resuming pumping,” Toukan said.