Ammon News - AMMAN The Jordanian government will approve on Tuesday a milestone trade agreement with an Estonian firm in a bid to tap the Kingdom's vast oil shale reserves in the southern region.

Minister of Energy and Mineral Resources Khaled Irani said the government will officially announce this key deal with the Estonian company of Eesti Energia on May 11th here in the presence of the Estonian president.

"The Cabinet will also endorse tomorrow a memorandum of understanding (MoU) with a Canadian company to explore gas and oil in the southern area of Jafer," he added.

Director General of the Natural Resources Authority (NRA) Maher Hijazin earlier told Petra the extraction for oil shale will target southern Attart Um Ghudran area.

The Estonian company is estimated to produce 36,000 barrels of oil a day, Hijazin said, adding the firm will reach its full commercial production capacity within ten years at an estimated cost of $6 billion.

In addition to extracting oil, Hijazin noted the Estonian firm will produce electricity from oil shale combustion, adding the project will generate 600-900 megawatt of electricity with a capital of around $1.5 billion.

Eesti Energia had been preparing technical, economic and engineering studies of the project, which are due to be forwarded to the government by the end of 2011.

The construction of a power plant to generate electricity will launch by 2015.

The deal comes as part of the Kingdom's efforts to exploit its large oil shale reserves to help meet its rising energy demands.

According to NRA estimates, the Kingdom has 40 billion tones of oil shale deposits in various areas.

/Petra/