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NEPCO to float tenders next year to buy more LNG

AMMAN — The state-owned National Electric Power Company (NEPCO) is scheduled to float several tenders in 2016 to buy liquefied natural gas (LNG) shipments, Abdel Fattah Daradkeh, the company’s director general, said Monday.

Shell provides Jordan with about 80 per cent of its energy needs at present and the company will float a tender to buy the remaining 20 per cent of its LNG needs from international markets, Daradkeh said in a phone interview.

According to the official, Jordan generates about 80 per cent of its energy needs via LNG after the opening of an LNG terminal in Aqaba in mid this year, which has enabled the Kingdom to start importing LNG for power generation and gradually reduce dependence on heavy fuel and diesel.

NEPCO suffered heavy losses over the past five years due to disruption in natural gas supplies from Egypt and relying on expensive heavy fuel for power generation.

The return to relying on LNG for electricity production in mid 2015 is a step that the government considers vital to reduce the national power bill and promises a brighter energy future for the country.

After incurring “huge” losses in past years following the halt of imports of natural gas from Egypt due to a series of explosions targeting the pipeline that used to supply the Kingdom, the energy bill used to constitute 20 per cent of the gross domestic product, according to official figures.

NEPCO losses were estimated at around JD5 billion between 2011 and 2015.

Some 350 million cubic feet of LNG are now pumped every day and used to generate electricity, according to NEPCO.

The government reached an agreement with Shell under which the company provides Jordan with 150 million cubic feet of supply every day for the next five years.

Daradkeh said NEPCO has awarded a tender to two international companies to supply Jordan with two LNG shipments.

Under the tender, Switzerland’s Gunvor will provide Jordan with a shipment of LNG of about 3-3.5 trillion British thermal units on March 24.

Spain’s Gas Natural will also provide Jordan with a 3-3.5 trillion British thermal units of LNG on February 13, said Daradkeh.

Related: Feds help competing LNG projects, but could now also help Alaska gas exports.

This article was written by Mohammad Ghazal from Jordan Times, Amman and was legally licensed through the NewsCred publisher network.