December 2, 2024 – Jordan and Egypt signed a cooperation agreement in Cairo yesterday, Sunday, to utilize Egypt’s gas infrastructure. Under the agreement, Jordan will use Egypt’s floating storage and regasification units (FSRUs) for the next two years.

The agreement was signed under the patronage of Dr. Saleh Al-Kharabsheh, Jordan's Minister of Energy and Mineral Resources, and Engineer Karim Badawi, Egypt's Minister of Petroleum and Mineral Resources, with the attendance of officials from both countries. The agreement was signed by Dr. Sufyan Batayneh, Director-General of Jordan’s National Electric Power Company (NEPCO), and Engineer Yassin Mohamed, Chairman of the Egyptian Natural Gas Holding Company (EGAS).

Minister Al-Kharabsheh stated in a press release following the signing that the primary goal of the agreement is to maximize resource efficiency in both countries at a lower cost. He confirmed that the use of floating storage and regasification units (FSRUs) will continue until the end of 2026, after which a new onshore regasification unit, currently under construction in Aqaba, will be utilized.

He added that the construction of the new liquefied natural gas (LNG) port project had commenced this month. The minister praised the strategic and distinguished energy relationship between Jordan and Egypt, emphasizing the importance of the agreement in leveraging infrastructure to promote cooperation, efficiency, and cost reduction for both parties.

Al-Kharabsheh described Jordanian-Egyptian relations as strategic and exceptional in various fields, especially energy cooperation, and highlighted the accumulated expertise of both countries in the energy sector, which could be further enhanced in the future.

Dr. Batayneh stated that the agreement is part of the joint cooperation between the governments of the Hashemite Kingdom of Jordan and the Arab Republic of Egypt in the energy sector. It aligns with governmental directives and NEPCO's plans to enhance the efficiency of Jordan's electrical system and strengthen energy security for both countries.

He explained that the agreement includes technical and commercial terms that safeguard the rights of both parties and ensure mutual benefit. Under the agreement, Jordan will receive liquefied natural gas through Egypt using pipelines connecting the two countries.

Dr. Batayneh added that the agreement will help reduce operational costs for the Aqaba LNG port and protect NEPCO from global price fluctuations if emergency LNG supplies are needed.

The agreement provides Jordan access to floating LNG storage and regasification units (FSRUs) owned by Egypt, starting from the signing date until the end of 2026. It ensures priority use of the FSRUs for both sides if simultaneous needs arise, allocating 350 million cubic feet per day to Jordan (50% of one unit’s capacity or 25% of two units’ capacities).

The agreement allows NEPCO to use LNG without incurring fixed costs when there is no need. The cost of consumed gas is estimated at $3 million per shipment, with an additional $5 million for transportation via Egypt's gas network. This means Jordan’s annual LNG cost will not exceed $10 million under the agreement.

By comparison, the current Aqaba LNG port costs approximately $70 million annually, highlighting the significant cost savings achieved through the agreement.

The agreement aims to provide a flexible and cost-effective alternative for supplying Jordan with LNG while new infrastructure projects are completed. The new LNG port in Aqaba is expected to be operational by the fourth quarter of 2026.