Five financing agreements have been signed to construct a US$300mn gas pipeline running from the southern Jordanian port city of Aqaba to power plants and large industrial consumers in the northern parts of the kingdom.

The pipeline is the second phase of an interregional project designed to carry Egyptian gas to Jordan and later to Syria, Lebanon, Turkey and Europe.

According to the deal, a bank syndicate led by the Housing Bank for Trade and Finance (HBTF) and grouping 19 Jordanian and Egyptian banks as well as financial institutions provided around US$160mn for the project.

Nearly US$125mn of the financing was provided in equity by the Amman-based Al Fajr Company which won a tender last year to extend the 393km pipeline through a consortium of five parties: Egypt Holding Gas Company, Gasco, Petrojet and Emppi as well as Egyptian finance ministry and the Egyptian National Investment Bank.

The remaining amount, around US$15mn, will be secured from revenues generated by the Aqaba Power Station which is functioning on Egyptian gas.

The pipeline starts from gasfields at Al Arish area and then Taba on the Egyptian side until reaching Aqaba where the first stage ends. Then, it goes from there to the northern parts of the kingdom where the second stage, implemented on a build, operate, own and transfer basis, concludes.

Then, the interregional pipeline will go to Syria, Lebanon, Turkey and the rest of Europe.

Some 10bn cubic metres of gas will flow through the US$1bn pipeline annually and Jordan will be provided with two billion cubic metres per year.