Go Ahead Given for Oil Shale Power Plant

For years now, Jordan’s huge oil shale deposits have been talked up as the answer to the Kingdom’s energy woes. But there are finally signs the dream of energy self-sufficiency is becoming a reality with the government signing off on a deal to build a $2.4 billion oil shale-fuelled power plant that’s scheduled to start generating electricity for local consumption by 2017.

The power plant will have a capacity of approximately 540MW and is expected to provide between 15 to 18 percent of the Kingdom’s current electricity needs. The project, led by Estonian company Enefit in partnership with YTL Power International Berhad and Near East Investment, will be the first of its kind in the region and aims to reduce the Kingdom’s expenditure on the import of oil products for power generation by more than JD350 million a year.

A team of representatives from Enefit will soon be arriving in Jordan to sign the final agreement with the government, after which construction will begin within six months. The power plant, to be constructed on a BOT basis, will provide electricity to the National Electric Power Company at a price of approximately 13 cents per kilowatt-hour, which is less than the current cost of generating electricity using diesel.

The Minister of Energy and Mineral Resources Mohammad Hamed said the arrangement will also include a payment of JD15 million annually from Enefit to the government in return for using oil shale for powering the plant. Cabinet approval of the deal last month came after Enefit threatened to abandon the project in May following delays to the power purchasing agreement price negotiations.

It’s anticipated that the construction phase of the plant will result in the creation of 3,000 jobs, followed by 1,000 permanent jobs to maintain and operate the plant. The project will draw on the expertise of the Estonians who have successfully been producing electricity from oil shale for the last 80 years. Bassam Kakish, president of the Jordan Oil Shale Energy Company, the Jordanian subsidiary of Enefit, estimates that Jordan has the fourth largest oil shale in the world, possessing up to 70 billion tons—even more than Estonian, which is energy self-sufficient and also sells electricity to neighboring countries.

Another deal between Enefit and the government is currently in process to construct a 40,000 bpd oil shale production plant to produce crude oil. While Enefit have already built a pilot plant for this project, the technology required to produce crude oil from oil shale is more complicated than producing electricity and will therefore take longer to finalize. However, Kakish expects this project will soon go ahead and supply Jordan with 40,000 bpd by 2018.