Ammon News - AMMONNEWS - The Lower House Tuesday opened a debate about the letter of intent signed between the state-owned National Electric Power Company (NEPCO) and Noble Energy, a U.S. company developing an offshore Israeli gas field in the Mediterranean Sea.

Under the agreement, Noble Energy will supply NEPCO with gas over a 15-year period at a cost of $15 billion.

Minister of Energy and Mineral Resources Mohammed Hamed told the lawmakers that the deal is in line with the government's quest to diversify energy sources and find secure energy supplies. He also assured the MPs that the government would take strategic decisions to address high energy costs that had severely strained the treasury.

These energy costs have created enormous economic challenges "that negatively impacted the state budget and resulted in a rise in the volume of debt," Hamed told the session, attended by Prime Minister Abdullah Ensour and cabinet ministers.

The soaring losses at NEPCO are economically "unhealthy and unsustainable", he said, adding that it was inevitable to act to greatly reduce the cost of electricity production and start to "extinguish" the huge accumulative losses.

The minister dismissed lawmakers' fears that the deal would leave Jordan "hostage" to a certain country, explaining that "placing Jordan in such a position is out of the question" and added that all options will be in accordance with the Kingdom's short- and long-term energy strategies.

"Jordan's higher interest is above all other considerations as long as the aspired-for goal is to secure energy sources in a manner to cut the financial cost on the treasury", Hamed told the chamber, assuring that "We will take all measures to address the energy crisis in accordance with the national interest, which solely governs our policy".

The minister noted that all technical and economic studies have indicated that imported gas from Israel will be half the price of liquefied gas and heavy fuel, and one-third of diesel prices, thus reducing NEPCO's energy bill by JD1.3 billion annually.

He cited the disruption of Egyptian gas supplies, the high demand on primary energy and the rising energy bill as reasons behind the decision to diversify energy sources, adding that the oil bill had soared to JD4 billion in 2013, causing huge losses to NEPCO.

Hamed said the Kingdom had imported more than 80 percent of its gas from Egypt in recent years, before supplies ground to a halt. He added that the failure to raise electricity tariffs to offset the soaring cost of production has resulted in NEPCO incurring accumulative losses of up to JD4.5 billion.