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Jordan pushes ahead with its oil shale project

Exploration & Production

Jordan is pushing ahead with a scheme to supply up to 14 per cent of its energy needs from oil shale as the country is looking at ways to not be so reliant on imports of oil and gas from Gulf countries.

The big dilemma facing Jordan is that it lacks conventional oil reserves and has limited gas deposits, which is the reason why the country imports 96 per cent of its fuel requirements. The aim is by 2020 for the country to be supplying 10 per cent of its energy demand from renewable sources and 6 to 10 per cent from nuclear power.

By 2020, oil shale could potentially be the country's biggest energy source. Jordan already has the fourth-largest oil shale accumulation in the world. The 40 billion to 70 billion tonnes resource, underlying as much as 60 per cent of the country's land surface, may contain the equivalent of 100 billion barrels of oil, according to the UK firm Jordan Energy and Mining.

Oil shale is sedimentary rock that contains kerogen and once extracted, oil shale can either be used directly as fuel for a power plant, or be processed to produce shale oil and other chemicals and materials. Jordan has granted a number of shale concessions in the last few years as the country plans to mine oil shale as an indigenous fuel source for electricity generation.

In 2009, Royal Dutch Shell signed a deal to explore and possibly exploit Jordan's deep oil shale deposits. The project, if commercially exploited, could produce in excess of 100,000 bpd.

Jordan also signed a 40-year concession with Eesti Energia in 2010 to exploit oil shale in the Attarat Umm Ghudran oil shale deposit with the government of Jordan. Under the agreement, the government expects to extract the equivalent of 20,000 bpd of oil by 2014.

At the end of 2010, Malaysia's YTL Power acquired a 30 per cent stake in Eesti oil shale project in Jordan which will see Eesti Energia and its Jordanian partner Near East Investment, along with YTL Power, will develop an oil plant with an output of about 38,000 bpd and a 900 MW oil-shale fired power plant.

"We are going into Jordan on a holistic basis, which means we are going to be involved in every part of the project," YTL Power's Director of Financial Analysis Lucius Chong told Reuters. Chong declined to put a specific dollar value on YTL Power's investment into Jordan, but said the project's capital costs are about US$5 billion.