Jordan LNG Project

Presented By: Eng. Ahmad Zubi / NEPCO

Contents:

• Introduction Part 1

• Terminal Project Part 2

• LNG Procurement Strategy Part 3

Part 1

Introduction

Quick Facts (2015) Area: 89 342 km2

Population: 9.9 million

GDP: USD 40 billion

GDP per capita: USD 6,100

GDP growth rate: 3.3%

Imported Energy: 97%

Electricity demand growth rate: 5.5%

Power Generation Capacity: 4,000 MW

Registered Peak Load: 3,300 MW

The Hashemite Kingdom Of Jordan

What is NEPCO?

• Is the National Electric Power Company ..

NEPCO (System Operator)

Principal

Consumers Distribution

Companies

Fuel Supply

Fuel cost

(P

ass thro

ugh)

Regulated Tariff (EMRC)

PPAs

Electrical

Interconnection

Renewable

Projects

Generation

Companies

PPAs

Single Buyer Model

In the year 2003, NEPCO

started to use the Egyptian

Gas, through a pipeline from

the Egyptian fields to Jordan

and extends to Syria, Lebanon

and Turkey (Arab Gas Pipeline

Project).

So, the Jordanian Power

Generation started to depend

mainly on the NG (>80%).

Natural Gas History in Jordan

But, from the year 2011, some circumstances occurred and affect the ability of

Egypt to Supply the NG to Jordan:

- Egyptian Gas Supply profile for Jordan in (mmscft/d) -

NEPCO Financial Crisis

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Contractual Limit

Actual Supply

•As result Jordan has resorted to import more expensive fuels such as HFO and

LFO which raised the energy bill further to 20% of the GDP and forced

NEPCO to increase substantial losses.

The optimum solution for Jordan was building the

LNG Terminal.

Part 2

Terminal Project

Project Main Elements

NEPCO Role

• MEMR act [As Regulator]

• The terminal started to receive LNG cargoes since 10.07.2015

Terminal construction cost was USD 65 million financed by Kuwait

Fund For Arab Economic Development.

The Terminal site and facilities has been leased to NEPCO through

a “Terminal User Agreement” with ADC.

The Terminal has been reviewed and approved by many LNG

suppliers (e.g. Shell, Vitol, BG, PB and Trafigura ..etc).

Sheikh Sabah Al Ahmad Terminal

Terminal doors are open for any company for inspection and study, and NEPCO welcomes any comment.

- Golar Eskimo upon arrival on 25.05.2015 -

Golar was reached upon a tender issued by MEMR in 2013.

The contract was signed on 13.11.2013 between MEMR & Golar

Eskimo, and transferred to NEPCO in August 2015 through

Novation Agreement signed between the parties.

Golar Eskimo

The term of the

agreement is for

10 years can be

terminated after

the 5th year by

NEPCO option.

Golar Eskimo

Golar Eskimo is an 160,000 m3 Floating Storage & Regasification

Unit.

By its three Regasification Skids, Golar Eskimo can send out NG

up to 710 mmscft/d (Peak Capacity).

Contractually, the maximum send out rate is 490 mmscft/d

(Maximum Capacity).

The contractual availability

of the FSRU is 98%

In spite of the relative stability of the sea water in the gulf of

Aqaba, we have 4 tug boats in Aqaba with power of 80 tons/tug.

Marine Services

These 4 tugs are

specialised only for the

LNG terminal.

The 4 Tugs are brand-new

made in Turkey by Sanmar

SPT was reached upon a tender issued by NEPCO in 2014.

SPT has a good experience in this field (i.e. as they work in

Mina Al-Ahmadi Gasport, Kuwait since 2007).

Terminal O&M

Third Party Surveyor

NEPCO contracted with INTERTEK as the Third Party

Surveyor for whole LNG cargoes reaches Sheikh Sabah

Al Ahmad Terminal.

A 10 years Gas

Transportation

Agreement has been

entered with Fajr

Company since 2015.

Under the Agreement,

Fajr transports the Gas

from the output of

Terminal at Aqaba to the

inlet of the power

plants all over the

country.

Gas Transportation

Part 3

LNG Procurement Strategy

Up to 10 years, NEPCO’s demand may not exceed 400mmscft/d,

if the Oil-Shale generation project is operated in 2020 as

expected.

NEPCO Needs

After that, the expectations may goes down also by 300

mmscf/d, if the operation of the Nuclear Project starts,

which is excepted to be in 2 phases in 2026 & 2027.

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NEPCO NG (mmscft/d)

The GoJ issued a

tender in 2013, which

awarded to Shell

upon competition

with 7 prequalified

companies.

A 5-years SPA was signed with Shell International

Trading Middle East on 21.01.2015 for a quantity of

59.13 tBtu/year (around 18-20 cargoes/year).

Shell 5 years Contract

SPA quantity can cover around 40% of NEPCO needs.

Furthermore, NEPCO used the SPA, to contract with Shell

to provide:

1. the Commissioning

Cargo on Golar

Eskimo itself, which

reached Aqaba with

3.3 tBtu of LNG.

2. Additional 6 cargoes

to be delivered in

2015.

Shell 5 years Contract

Spot Market Supply

In order to complete its need, NEPCO has signed 22 MSA

with the following suppliers:

Vitol

On the 17th of August

Trafigura

On the 1st of September

Trafigura

On the 21st of September

Trafigura

On the 6th of October

BG

On the 13th of October

NEPCO purchases spot cargoes through open tenders

5 spot cargoes were purchased in 2015:

3 spot cargoes were purchased in 2016:

Spot Market Supply

Gas Natural

On the 16th of February

Gunvor

On the 23rd of March

Shell

On the 23rd of July

The requirements for NEPCO to sign any MSA with a new

LNG Supplier are:

1. to have an evidence of supplying 10 cargoes successfully

through the last year,

2. to provide the financial statements of the last 3 years.

NEPCO is studying the ability to get along without the

requirements mentioned above, against obtaining suitable

performance guarantee and liability cap.

Master Sales Agreements

NEPCO still welcoming signing any MSA with

any potential LNG supplier.

NEPCO issued another mid-term LNG supply tender (2

years) in July, 2015 and Shell also won the tender through a

competition with 14 potential supplier who submit for

NEPCO their respectful offers.

The contract with Shell has been signed on 20.10.2015 for

supplying NEPCO with 59.13 tBTU/year in the years

2016&2017.

Shell 2016/2017 Contract

NEPCO LNG in (2015-2017)

2015

SPOT CARGOES

SHELL - 5 YEARS SPA

SHELL - 2 YEARS CONTRACT

24%

76%

2017 2016

44% 46%

46%

8%

44%

12%

86,7%

LNG

Risha Gas Field

Diesel

HFO

Electrical

InterconnectionWind

Solar

Hydro0

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100

150

200

250

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450

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

MM

SCF/d

The average of quantities of LNG was

332 mmscf/d

The average of LNG quantities in 2016

LNG for Electricity in 2016

The LNG was contributed around

87% of all power generated in 2016

LNG Demand in 2017

Further to Shell LNG supplies for NEPCO, it Expects to have 6 additional cargoes from the spot market next year April-September (i.e. a cargo/month).

The tenders will be issued by NEPCO 60 days before cargo required date.

The tender documents will sent to all the companies that signed MSA with NEPCO.

LNG Plans after 2017

As NEPCO signed an agreement with

Shell for 2016-2017, NEPCO may issue a

tender in April 2017 for LNG supply in

the next year(s).

The tender may be for one or two years,

for a quantity of 59.13 TBTU/Year.

2015

2016

2017

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$600

$700

Cost Saving

(million USD)

2015

2016

2017

NEPCO Expected Saving From Using LNG in (2015-2017)

• Considering the Brent crude is $60 a barrel, the expected saving in

the generation cost for NEPCO in the current years due to the

LNG Project, will be as follows:

Terminal Usage Agreement has been

executed between EGAS and NEPCO,

and accordingly the reverse flow to

Egypt started on 06.08.2015.

So, by reverse flow in the JGTP, NEPCO

Shares the available capacity with the

Egyptian taking into consideration not

to affect fulfilling of Jordan needs.

Accordingly, EGAS brought 8 cargoes in

2015 and the same number in 2016 to

the Terminal. And Nowadays, we have at

least an LNG vessel at the terminal per

week.

LNG Cooperation with Egypt

NEPCO now uses this terminal to help the brotherly Egyptian side to face the shortage of production.

Jordan Industry Needs

The estimated need of NG for the industrial sector: Is about 70 mmscft/d.

The industry sector in Jordan still need Infrastructure to be able to use the NG which is excepted not to be ready before 2017.

In Jordan, up to 2022, Fajr Company has the exclusive rights to sell NG in pipelines to any entity consume more than 1000 mmBtu/year.

For this purpose, NEPCO executed this year a GSPA with Fajr to sell them the NG from the LNG Terminal, the only available source for gas in Jordan nowadays.

THANK YOU

……………..

AHMAD ZUBI