Jordan to finalize Leviathan gas deal next month

Leviathan

Jordan's Energy Minister Mohammed Hamed told "Reuters" that the 15-year deal will be signed in November.

Jordan expects to finalize a deal next month with Noble Energy Inc. (NYSE: NBL) to supply the kingdom with natural gas from Israel's Leviathan field, "Reuters" reports. The deal could save at least $1.4 billion in Jordan's annual import energy bill, Jordan's Energy Minister Mohammed Hamed said.

Jordan is struggling to meet electricity demand which is growing by more than 7% due to population increase and industrial expansion. At the same time, reducing losses at state electricity firm NEPCO are a key performance criterion in Jordan's 36-month standby loan deal with the IMF.

NEPCO accrued debts of $6.6 billion after it was forced to pay independent power producers for energy generated from costly diesel and heavy fuel, after disruptions to cheap Egyptian gas supplies.

"We are working on the long-term supply deal (with Noble Energy) but we have not yet decided the amounts and prices. We are aiming by mid-November to reach an agreement," Hamed told "Reuters."

NEPCO signed a letter of intent last September with Noble but the parties did not say when the deal would be finalized.

Under the proposed 15 year deal, gas would be transferred directly across the border with Israel following the completion of a pipeline and would likely start arriving by late 2017.

Noble owns 39.66% of Leviathan, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%.

Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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