Talks between the Egyptian Ministry of Petroleum, Iraq and Jordan to construct a gas line servicing the countries have ended as a result of violence, instability and insecurity, said a senior official in gas holding company EGAS.
The goal was for the Iraqi gas line to supply Jordan with its fuel needs and provide for a portion of Egypt’s needs as well, or to transform gas to its liquid form in one of the factories operating in Egypt, which would then be exported.
A study focusing on the construction of a pipeline to transport gas from Iraq to Jordan and then Egypt was supposed to be completed at the end of this year, as Iraq hopes to increase oil production through the year 2018. This would create a surplus that could potentially be exported, but current events have prevented this from happening, the official said.
He pointed out that during March, Iraq signed a memorandum of understanding with Jordan to execute the pipeline project to transport crude and gas from Iraq to the Gulf of Aqaba. This would allow crude oil to be exported via Jordan under secure and stable conditions.
Two agreements were also signed with the Jordanian and Iraqi petroleum ministries to transport natural gas via the Arab Gas Pipeline and link a liquefied natural gas import project with gas pipelines among the Jordanian Ministry of Energy and Mineral Resources as well as Jordan’s FAJR.
The official also mentioned that no private sector companies have offered to import the necessary supplies of natural gas to EGAS, and that a group of factories will be allowed to import the gas, but not separately.
The official added that the private sector may turn to imports to provide for their natural gas needs without any intervention from EGAS, and that all the company will do is receive the gas on the national grid and deliver it to importers.
He stressed that the importer will enter into agreements with suppliers and pay the agreed upon amount without any financial support from the government, and that the private sector must construct the necessary infrastructure to receive the liquefied natural gas.
He pointed out that Egyptian gas production is currently incapable of meeting new factories’ needs through 2018. “Whoever wants to import may import, and whoever wants to wait until production rates to increase over the coming years may do so,” and there is no alternative, the official said.