Chinese finance Jordan’s first oil shale power plant
Amman - Jordan secured $1.7 billion in Chinese loans to build the country’s first shale oil-fuelled power plant to ease the burden power consumption places on the Jordan’s squeezed economy, according to a partner in the project.
The Chinese loans came after Jordan had tried to work with unspecified regional and international governments and lending firms, Mohammad Maaitah, project partner of Attarat Power Company (APCO), said.
The secured loan came against the backdrop of environmentalists’ warning that shale dust could cause pulmonary diseases in humans.
Jordan, a country barren of natural resources and heavily dependent on donations and remittances by Jordanian expatriates to keep its fragile economy afloat, imports 97% of its energy needs.
Jordan’s energy bill recently hit unprecedented levels due to the influx of refugees fleeing Syria’s civil war and a suspension, due to pipeline sabotage, of gas deliveries from Egypt, which forced Jordan to switch to petroleum to generate electricity. Other reasons included an increase in demand and rising oil prices in 2011-13.
Subsequently, Jordan’s budget deficit reached a record $30 billion, undermining government efforts to ease foreign debt and post acceptable growth rates. Amman tightened spending and rationed electricity on highways outside main cities to avoid cuts to households.
The government also embraced alternative energy, setting up solar plants and windmills, and mapped out plans to introduce energy from nuclear plants within a few years. The state offered tax and customs incentives to citizens who replace fuel-driven vehicles with electric models.
One of Jordan’s main projects is to utilise oil shale combustion in its first shale oil-fuelled power plant.
Maaitah said negotiations were tough, as many international and regional financing entities did not show interest in financing the oil shale project. “But finally, we secured the financing from Chinese banks and we’ll go ahead with our project,” he said.
He said APCO signed a memorandum of understanding with the Bank of China and the Industrial and Commercial Bank of China for the $1.7 billion loan to finance the oil shale power plant.
The signing followed a September tour of China by Jordan’s King Abdullah II, who invited Chinese business leaders and politicians to invest in his country.
The oil shale loan is guaranteed by the China Export and Credit Corporation, Maaitah noted. He said the deadline to secure financing for the 470-megawatt plant was October 1st. The project is likely to create 3,000 direct jobs during the construction phase and 700 jobs for ongoing operations, he said.
According to a 2014 agreement with the Jordanian government, the APCO plant should be operational in the second half of 2018 and is expected to slash the country’s energy bill by $500 million annually as the electricity it will produce will be bought at half the current price.
“The other partners in the project are expected to secure the rest of the money needed for the $2.2 billion plant in about a month’s time,” Maaitah said. “If we do not start construction on the project in early 2016, we will not be able to complete the plant on time.”
The facility is expected to utilise Jordan’s reserves of oil shale. According to the World Energy Council, Jordan has the fifth largest oil shale resource in the world, estimated at 40 billion-70 billion tonnes. Geological surveys indicate that the existing deposits underlie more than 60-70% of the kingdom’s territory in 26 known localities.
Humans have used oil shale as a fuel since prehistoric times because it generally burns without any processing.
An official at Jordan’s Ministry of Environment, however, warned that processing oil shale must be monitored carefully to avoid serious health risks.
“In general, Jordanian oil shales are of high quality but we need to be extra careful and study all factors in building and utilising the power plant, and mining the oil shale in order to keep the project safe,” the official said.
He insisted on anonymity, saying he was not allowed to make statements to the media.
The official insisted that experience gained in Estonia suggests that workers should be monitored for evidence of pulmonary diseases, especially since the incidence of respiratory diseases in other industries, such as phosphate mining, indicates that shale dust and ash could be hazardous.
“The plant will produce gaseous, liquid and solid pollutants that must be disposed of appropriately,” the environmentalist said. “Pollutants arise when the raw shale is converted to useful products, by-products or waste by different processing units.”
Many environmental concerns exist, from fine dust, carbon dioxide, hydrocarbon and sulphur oxides going into the air during the production process, he warned.
Therefore, he said, the general public living near the oil shale processing plant may be affected by serious health risks including respiratory disabilities.