Egypt Pipeline Explosion 311.
(photo credit: REUTERS)
Jordanian Minister of Energy Khaled Toukan has announced that Jordan will sign a
new natural gas agreement with Egypt in September, according to an AP report
released on Sunday. He said that while several attacks this year on Egypt’s gas
pipeline prompted Jordan to look for alternatives, it is now trying to use
Egyptian gas to meet its energy needs.
Toukan added that Jordan will pay
more for the Egyptian gas, but he declined to say by how much.
gas generates 80% of Jordan’s electricity and the switch to fuel oil and diesel
has cost it $4.2 million a day.
Egyptian media reported in June that
Jordan had agreed to pay $6-7 per million British thermal units (BTU) of natural
gas, which the media claims is the global market price, up from the current $3
per million BTU. Jordan has two long-term gas contracts with Egypt, including
one at the heavily subsidized price of $1.50 per million BTU. The new deal
applies to the second contract, which covers a small amount of Jordan’s gas
An Israeli source told “Globes” in June that the weighted
price for the two contracts is less than Israel pays Egypt for gas delivered by
East Mediterranean Gas Company (EMGC).
The prices mentioned in the
Egyptian media are actually the retail price paid by Jordanian customers, not
the wholesale price that Jordan will pay the Egypt National Gas Company (EGAS).
Both Jordan and Israel do not buy gas directly from the producer, but through
middlemen – EMGC in the case of Israel, and Jordan through Al-Sharq Gas Company.