Energy Game: Jordan

As was seen in class before the commencement of our Spring Break, there is a history of foreign involvement in the development of energy resources in the Middle East. Presented in class was the case of a US oil corporation in the late 1940’s. Just recently, China secured a bid for the development of the Attarat um Ghudran oil shale deposit in Jordan, after the Guangdong Yudean Group became a 45% shareholder of the Attarat Power Company. The project, which involves the construction of a 470MW oil shale power plant (operational by 2020), is to be financed by Chinese banks and directed by the Guangdong Power Engineering Corporation. The electricity generated by this plant would provide 10-15% of Jordan’s future electricity needs. It is referred to as the “largest private-sector project in Jordan’s history”.[1]

Not so endowed with crude oil reserves as its neighbors, Jordan has historically imported much of its energy needs (approx. 90%, 2012). The vast majority of these energy imports are in the form of crude oil, sourced from Saudi Aramco (approx. 2.5 million barrels per month, 2016). Another supplier has been Iraq, with whom Jordan has been pursuing an oil/natural gas pipeline project which, if completed, would transport 1 million barrels of oil per day, from the Basra oil fields to the port of Aqaba.

Following the Arab Spring and the resultant threats experienced to its energy security, Jordan has since been very engaged in developing its energy independence, namely via the diversification of its energy mix and the development of domestic energy resources. An ambitious strategy, tied with a relatively stable market, has attracted $10s of billions in foreign, energy-related investments. Jordan’s mid-term goals involve reducing dependence on oil products, increasing natural gas inputs, and introducing alternative energy capacity (i.e. renewable, nuclear, and oil shale). While Jordan is endowed with sizeable uranium deposits, a foray into nuclear energy might prove risky given regional water scarcity. Regarding renewable energy resources, Jordan’s 2020 targets are 600 and 1200 MW for solar (PV) and wind, respectively, totaling 10% of future electricity demand. These goals are viable considering the country’s abundant wind (consistently high speeds in the south) and solar (sunbelt orientation; 300 days of sun per year) resources. The projected fuel mix for Jordan (in 2020) is as follows: oil products, 40%; natural gas, 20%; oil shale, 14%; renewable, 10%; nuclear, 6%. Overall, domestic electricity production is projected to increase by 56% (from 2015 levels).[2]

Why is China involved? China seeks greater involvement in the Middle East mainly for economic reasons and it is evident that Chinese economic pressure has been expanding throughout the region in the past decade. As China’s interests are purely economic, this expansion is generally welcomed amongst Middle East nations. It may be said that China enjoys an ‘unaligned’ reputation in the region, much in contrast to Russia or the US. Ultimately, China’s greater goal of ushering in a new, Sino-centric, international trade-regime calls both for closer economic ties and greater economic stability with/in the Middle East.[3]

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Composed by: Luc Guittard

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[1] http://www.gtreview.com/news/mena/jordan-shale-oil-project-reaches-financial-close/

[2] http://www.mei.edu/content/article/jordans-energy-future-path-forward

[3] http://www.aljazeera.com/indepth/opinion/2016/01/china-vision-middle-east-160121052018955.html

[4] http://yashnews.com/170316-amman-march-16-2017-xinhua-jason