ammonnews.net

Ammon News - AMMONNEWS - A senior Jordanian official told "Ad-Dustour" that JEPCO is buying only 75% of the gas volume reported by the Leviathan partners.

Are the details of the gas deal between the Leviathan partners and the Jordan's National Electric Power Company (JEPCO) different than those published upon the signing of the agreement? In a briefing to reporters provided by a senior Jordanian official, and quoted in the "Ad-Dustour" newspaper, the official said that the Jordanians are obligated to buy only 75% of the previously published volume of gas from Leviathan - 2.25 BCM per year. Moreover, since the gas price is linked to the price of an oil barrel, the price per thermal unit will be $5-5.5 at the first stage of the agreement, rather than $6.3 as published.

According to experts in the field, Jordan will purchase at least 3 BCM annually, due to its high demand for natural gas.

Leumi Capital Markets gas and energy analyst Ella Fried says, "Since Jordan has a real demand for natural gas, the financing entities will follow a weighed formula between 75% and 100%. This project has a regional significance for the Americans. President Obama mentioned cooperation between Israel and Jordan as his achievement and gas is the largest economic project between the states." Therefore, Fried believes that the agreement with Jordan significantly improves the chances of Leviathan being financed.

The price issue is also complex, since it is linked to the price of an oil barrel. The parties in this agreement refrained from publishing the oil price forecast they relied on, but the accepted forecast among sources dealing in this field is that the current price, of less than $50 per barrel, is at the lower range of forecasts for the future.

Since the price of $6.3 per thermal unit is the average price over 15 years, several experts agree that the price at the first stage will be $5-5.5 per thermal unit.

*Globes