Final preparations are under way to extend financing to a pipeline project that would carry gas from the southern Jordanian port city of Aqaba to the Rehab Power Plant in the northern part of the kingdom.
Energy and Mineral Resources Minister Azmi Khreisat estimates the cost of the project at around US$300mn and expects the construction of the 400km pipeline to conclude by early 2006.
Around US$160mn of the funding will come from a bank syndication grouping Jordanian and Egyptian banks led by the Housing Bank for Trade and Finance, according to the bank’s chief executive officer Ahmad Abdel Fattah.
Nearly US$125mn of the financing will be provided by the Amman-based Al Fajr Company which is entrusted with implementing the project through a consortium of four companies: Egypt Holding Gas Company, Gasco, Petrojet and Emppi as well as the National Investment Bank in Egypt, indicates Abdul Fattah.
The remaining funds will be secured from revenues generated by the Aqaba Power Station which recently started operating on the gas provided by Egypt to generate electricity.
The Aqaba-Rehab pipeline project, which will be implemented on a build, operate, own and transfer (BOOT) basis, is the second phase of an inter-regional venture, known as the Arabian Pipeline Project.
The gas pipeline links Egypt, which enjoys more than 56tn cubic feet of proven gas reserves, with Jordan before it goes to Syria, Lebanon, Turkey and other European countries.
The pipeline originally starts from gasfields at the Al Arish area on the Egyptian side until reaching Aqaba where the first phase ends.
The project is expected to save Jordan US$50mn annually in addition to the fact that gas is a less harmful source of energy.