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Thu 18 Apr 2013 11:52 AM

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Six firms bid to build Jordan's first shale plant

Project is part of country's intended future energy mix as it seeks to cut fuel imports

Six firms bid to build Jordan's first shale plant
Flag of Jordan

Six companies have bid to build Jordan's first oil shale power plant which is part of the country's intended future energy mix as it strives to lessen its dependence on imported fuel.

Citing the Attarat Power Company (APCO), the Jordan Times reported the six companies and consortiums that submitted bids include Alstom/Daewoo E&C (France/Korea), Hyundai E&C/LG International (Korea), Samsung Engineering (Korea), Posco/Daewoo International (Korea), China Machinery Engineering Corporation (China), and Guangdong Power (China).

APCO, which is a unit of Estonia's Enefit (Eesti Energia AS), will now evaluate the bids before moving forward with negotiations with the preferred contractors, the Times said citing a company statement. The construction of the 500 megawatt plant is to commence next year and start generating electricity for local consumption by 2017 reducing the country's energy bill by about JD350 a year, the newspaper reported.

Jordan’s import bill for fuel accounts for about 20 percent of gross domestic product (GDP) and the kingdom which has one of the smallest economies in the Arab world, relies on foreign grants and aid to finance its current account and fiscal deficits.

Jordan until recently was dependent on Egypt for its gas supply, which has caused its public debt to soar. The kingdom's public debt rose 23.7 percent to JD16.5bn or about 75 percent of gross domestic product last year, according to government figures.

The kingdom has the world’s fourth-largest reserves of oil shale (about 40 billion tons), an organic-rich, fine-grained sedimentary rock from which liquid hydrocarbons (shale oil) can be produced. Shale oil is a substitute for conventional crude oil, and the oil can also be burned directly for power production similar to coal.

Shale could help strengthen the fiscal position of Jordan whose economy has been impacted by the regional upheaval in the Arab world. The kingdom's economy grew by 2.7 per cent in 2012, less than International Monetary Fund forecasts however faster than the previous year, as a result of the unrest in Syria and a slowdown in foreign grants and aid, according to figures from the state-run Department of Statistics.

The kingdom’s economy is forecast to expand 3.5 percent this year, according to the IMF.

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