Egypt Resumes Gas Export to Jordan

By Administrator On May 17, 2012

Until now, both Israel and Jordan were affected by multiple attacks on Sinai pipeline; gas supplies to Israel remain suspended.

Egypt has resumed natural gas deliveries to Jordan, even as it has severed supplies to Israel and canceled the gas sale contract with East Mediterranean Gas Company (EMG), in which Yousef Maiman is a shareholder, Globes reported Thursday.

Until now, both Israel and Jordan were affected by the multiple attacks on gas pipelines in Sinai, which halted deliveries for 200 days in 2011, and stopped them almost entirely since the beginning of 2012. However, while deliveries to Jordan are due to resume this month, Israel will get nothing. The Egyptian Natural Gas Company announced that deliveries to Jordan will gradually increase from 500 million cubic meters a year to more than 1.5 billion cubic meters (BCM).

Jordan consumes 3.5 BCM of natural gas a year, most of which is supplied by Egypt, under a 2002 agreement. Before the fall of the Mubarak regime in February 2011, Egyptian gas generated 80% of Jordan’s electricity, compared with 20% of Israel’s.

The disruptions in Egyptian gas deliveries forced Jordan to increase its expenditures on alternative fuels for generating electricity from $1.4 billion in 2011 and will spend an estimated $2 billion in 2012. Israel was forced to increase its spending on alternative fuels to NIS 12 billion (over $3 billion). However, the comparative cost to Jordan is far higher, given that its GDP is a tenth of Israel’s.

But whereas Israel has raised electricity rates 25% following the crisis in Egyptian gas, Jordan’s parliament refused to approve similar measures, forcing the government to subsidize the extra expenditures in full from the state budget.

Egyptian gas deliveries to Jordan began to decline in 2010, when President Hosni Mubarak was still in power, due to domestic gas shortages. Egypt delivered 3.1 BCM of gas to Jordan in 2009, 2.26 BCM in 2010, and 0.88 BCM in 2011, as the disruptions kicked in.

Egypt delivered 2.1 BCM of gas to Israel in 2010 and 0.7 BCM in 2011.