Jordan Times
Thursday, July 8, 2004
Financing agreements signed to
construct gas pipeline
By Khalid Dalal
AMMAN — Five financing agreements were signed here Wednesday to construct a $300
million gas pipeline running from the southern port city of Aqaba to power
plants and large industrial consumers in the northern parts of the Kingdom.
The pipeline is the second phase of an interregional project designed to carry
Egyptian gas to Jordan and later to Syria, Lebanon, Turkey and Europe.
According to Wednesday's deal, a bank syndicate led by the Housing Bank for
Trade and Finance (HBTF) and grouping 19 Jordanian and Egyptian banks as well as
financial institutions provided around $160 million for the project, said HBTF
Chief Executive Officer Ahmad Abdel Fattah.
Nearly $125 million of the financing was provided in equity by the Amman-based
Al Fajr Company which won a tender last year to extend the 393-kilometre
pipeline through a consortium of five parties: Egypt Holding Gas Company, GASCO,
Petrojet and Emppi as well as Egyptian finance ministry and the Egyptian
National Investment Bank.
The remaining amount, around $15 million, will be secured from revenues
generated by the Aqaba Power Station which is currently functioning on Egyptian
gas.
The pipeline starts from gas fields at Al Arish area and then Taba on the
Egyptian side until reaching Aqaba where the first stage ends. Then, it goes
from there to the northern parts of the Kingdom where the second stage,
implemented on a build, operate, own and transfer basis, concludes.
Then, the interregional pipeline will go to Syria, Lebanon, Turkey and the rest
of Europe.
“The project will have very positive impacts on the economies of countries where
the pipeline passes,” said Energy and Mineral Resources Minister Azmi Khreisat.
Ten billion cubic metres of gas will flow through the $1 billion pipeline
annually and Jordan will be provided with two billion cubic metres per year.
“In addition, gas provides a cheaper and less harmful source of energy” compared
to heavy fuel, said HBTF Chairman Michal Marto.
According to a press release by the Energy Ministry, gas sales in the first ten
years within Jordan are expected to be around $1.5 billion at least.