Jordan has traditionally depended heavily on imported crude oil for its energy use. Steadily rising energy demand, more expensive crude oil, and the devaluation of the Jordanian Dinar in recent years have made it necessary for Jordan to seek alternatives to imported crude oil for its energy use.

For this reason, Jordanian authorities actively encourage intensive studies of possibilities for developing indigenous energy sources, as well as energy conservation and more efficient energy use.

However, Jordan possesses good solar and oil shale resources, as well as hydropower and wind energy resources. It has also good levels of solar and wind energy to make employment of these energy sources feasible and commercially attractive.

The two most energy consuming sectors in Jordan are transportation and electricity. For energy conservation measures, these two sectors must be prioritized. The third most energy consuming sector is industry, where process technologies determine consumption levels as well as prospects for future improvements.

Jordan looks to increase and diversify energy sources

Jordan is seeking to increase and diversify its energy sources with oil, gas and electricity projects, including windfarms, to make up for its lack of natural resources. Since last year, the Kingdom has linked its electricity grid to those of Syria and Egypt, and within a year it will have begun laying pipelines to import Iraqi oil and Egyptian natural gas.

During the 1980s, minor oil discoveries were made, plus a gas field in the area of Risheh to the east of the country producing 98 million cubic metres per day to generate 12 per cent of the country's total electricity production of 1,500 megawatts.

Last year, Amman invited two tenders for laying a pipeline from the southern port of Aqaba through Jordan to the northern border, which would transport Egyptian natural gas to Syria, Lebanon and eventually Cyprus. The project, to be begun at the end of the year, will take between 24 and 30 months to complete. Out of the pipeline's total capacity of 10 billiion cubic metres per year, Jordan will need less than one billion.

Alongside that, the construction of the Iraqi oil pipeline which will have a capacity of 100,000 barrels per day, moving to 150,000 in a later stage to meet expected higher demand, will start at the end of 2002 and should be completed in 18 months. Costing an estimated $350 million, it will replace the current supply route using road tankers.

The current output capacity of Jordan's only oil refinery, run by the private sector, is 100,000 barrels per day of various products from Iraqi crude. It is set to grow by 50,000 barrels per day between now and 2005.

Jordan depends entirely on Iraq for its crude oil supply and gets a preferential rate from that country.

Separate to the oil and gas supply plans, discussions are also taking place with a Belgian firm over the construction of the first private power station in Jordan, with a capacity of 350 megawatts.