meed-logo

line1 line2 line3
SIGN IN / REGISTER

Jordan’s oil and gas sector battles sluggish phase

6 June 2023

This package on Jordan’s oil and gas sector also includes:

> Jordanian and Turkish firms to build phosphoric acid plant
> Jordan selects refinery expansion winner
> Contractors await official award for Jordan refinery project
> Construction starts for phosphates plant in Jordan

 

Vital oil and gas projects in Jordan are witnessing little to no progress without the robust project finance structure needed to help the sector’s growth. 

Jordan imports more than 90 per cent of its oil, gas and refined product requirements and therefore has a strong economic case for developing hydrocarbon infrastructure projects.

However, despite the government being willing to push through projects deemed essential for reducing reliance on energy imports, the lack of project financing options and inability to attract foreign investments into the energy industry has led to these projects stalling.

Delays to the fourth expansion phase of the Zarqa refinery complex, Jordan’s only oil refining asset, are a prime example of the sluggish environment in Jordan’s oil and gas sector.

Zarqa refinery expansion

Located in Zarqa governorate, roughly 35 kilometres east of the Jordanian capital Amman, the refinery has a capacity of 60,000 barrels a day (b/d).

The refinery’s first expansion project was completed in 1970, when capacity was boosted to 2,100 tonnes a day. The second expansion was completed in 1973, and the third in 1982, when the refinery’s production was increased to 8,700 tonnes a day.

Jordan Petroleum Refinery Company (JPRC) aims to increase Zarqa’s refining potential by two and a half times to 150,000 b/d. The expansion is also planned to allow the Zarqa refinery to upgrade residual fuel oil into lighter products, in accordance with Euro 5 emission standards, to reduce reliance on imports.

JPRC has been working to double the Zarqa refinery’s production capacity since 2017, but the project has experienced several start-stops.

JPRC signed two separate agreements in April 2017 with the US’ Honeywell UOP and KBR to facilitate the expansion project.

Under the terms of the agreement, Honeywell UOP was to provide manager licensor services, technology licensing, front-end engineering and design (feed) consultancy services and basic engineering designs, as well as catalysts and process equipment, training and start-up services.

KBR was to license its proprietary slurry-phase hydrocracking technology for the project. KBR’s scope of work increased in November 2017 when it signed another agreement with JPRC for the basic engineering design of a residue hydroprocessor to be installed as part of the expansion.

In October 2017, Spain’s Tecnicas Reunidas was appointed feed consultant for the project. Feed work resumed in July 2018 after a temporary suspension, with KBR selected as the new process technology licensor. France-based Technip Energies is the project management consultant.

Prevailing situation

The prospects for the Zarqa refinery’s fourth expansion brightened recently when JPRC was reported to have selected contractors to execute engineering, procurement and construction (EPC) works on the project.

JPRC’s CEO, Abdul Karim al-Alawin, told Jordan’s Arabic-language newspaper Alghad that the state-owned refiner had awarded the project’s main contract, but stopped short of revealing the winner.

MEED learned through sources that JPRC had selected a consortium of Italian contractor Tecnimont and China’s Sinopec Engineering to execute EPC works on the expansion project. According to the sources, JPRC issued a notification in “early May” to all bidders competing for the project, informing them of the selection of Tecnimont/Sinopec Engineering for the project’s main contract.

However, the official EPC contract is yet to be awarded as JPRC continues to secure funding from international credit agencies and other lenders for the project, which is estimated to cost $2.64bn, according to Al-Alawin.

“There is no definite date for this. We are still in the negotiation process for funding. We cannot decide when these negotiations are completed,” the CEO told Alghad.

Oil shale resources

To offset high energy import costs, Jordan is focusing on developing its oil shale resources. The country possesses the fourth-largest reserves of the mineral deposit globally, behind the US, China and Russia, with an estimated 90-100 billion barrels of oil in its shale deposits.

The kingdom has achieved some measure of success in its oil shale development efforts in the past. In June 2021, the first 235MW power generation unit of Jordan’s $2.2bn oil shale independent power producer (IPP) project was connected to the national electricity grid.

Also in 2021, Amman was reportedly planning to launch a hydrocarbon exploration licensing round for nine concession areas across the country – an exercise yet to occur. The proposed licensing round would have focused on the Al-Azraq, Jafr, West Safawi, Sirhan, Sirhan Development, Dead Sea, Northern highlands, Petra and Rum concession areas.

Progress has been made on a project to exploit oil shale reserves in the Isfir-Jafr area, which measures 380 square kilometres and is located approximately 200km south of Amman.

Canada’s Questerre Energy Corporation signed a memorandum of understanding (MoU) with Jordan’s Ministry of Energy & Mineral Resources in 2015 to appraise and develop oil shale in the Isfir-Jafr acreage. According to the latest information gathered by MEED Projects, the partners are preparing the main tender for the project.

Separately, in January this year, the ministry signed another MoU with Al-Majarrah Company for Shale Oil & Natural Resources to extract oil shale in Jordan’s Al-Lajoun area, which spans 15 sq km. Al-Majarrah is said to have begun a feasibility study for the project.

MEED's July 2023 report on Jordan also includes:

> POWER & WATER: Jordan sustains utility infrastructure progress
> CONSTRUCTION: Hospital boost for Jordan construction

https://image.digitalinsightresearch.in/uploads/NewsArticle/10913941/main.jpg
Indrajit Sen

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Nakheel awards $953m Palm Jebel Ali villas deal

    27 April 2026

    Dubai-based real estate developer Nakheel, now part of Dubai Holding, has awarded two contracts worth AED3.5bn ($953m) to local firms for the construction of 544 villas at its Palm Jebel Ali project in Dubai.

    The first contract was awarded to Ginco General Contracting for the construction of 354 villas across fronds A to D.

    The second contract was awarded to United Engineering Construction Company (Unec) for the construction of 190 villas on fronds E and F.

    Construction is expected to begin in Q2 this year, with completion scheduled for 2028.

    Earlier phases

    In October 2024, Nakheel awarded three contracts worth AED5bn ($1.3bn) for the construction of 723 villas on fronds K to P. The contracts went to Ginco, Unec and the local Shapoorji Pallonji.

    Under these awards, Ginco is delivering 197 villas on fronds O and P, Shapoorji Pallonji is constructing 275 villas on fronds M and N, and Unec is building 251 villas on fronds K and L. Villa construction is expected to be completed by 2026.

    Infrastructure works

    This was followed by Nakheel awarding infrastructure contracts worth over AED750m ($204m) to local firm Dutco Construction for works on Palm Jebel Ali.

    The infrastructure work includes utility connections, excavation, backfilling, and the construction of roads and pavements across fronds A to G. It also covers 11-kilovolt power distribution and telecommunications-related utility works.

    Reclamation contract

    In August 2024, Nakheel awarded an AED810m ($220m) contract to complete the reclamation works for the project.

    The contract was awarded to Belgium’s Jan De Nul. Its scope includes dredging, land reclamation, beach profiling and sand placement to support the construction of villas across all fronds.

    Masterplan details

    Nakheel released details of the new masterplan for Palm Jebel Ali in June 2023. Twice the size of Palm Jumeirah, Palm Jebel Ali will have 110 kilometres of shoreline and extensive green spaces. The development will feature more than 80 hotels and resorts, along with a range of entertainment and leisure facilities.

    It includes seven connected islands that will cater to approximately 35,000 families. The development also emphasises sustainability, with 30% of public facilities expected to be powered by renewable energy.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577782/main.jpg
    Yasir Iqbal
  • Iraq’s first LNG terminal to be completed in June

    27 April 2026

    Iraq’s first liquefied natural gas (LNG) import terminal is expected to be completed in early June, according to the country’s Ministry of Electricity.

    The terminal, which has an estimated investment value of $450m, is being developed at the Port of Khor Al-Zubair and will have a capacity of 750 million standard cubic feet a day (cf/d).

    Ministry spokesperson Ahmed Mousa told the Iraqi News Agency that “work is proceeding at an accelerated pace to complete the LNG platform”, noting that “the government has set 1 June as the date for finishing the project”.

    In October last year, US-based Excelerate Energy signed a commercial agreement with a subsidiary of Iraq’s Ministry of Electricity to develop the floating LNG terminal.

    The contract was signed at the office of Iraq’s Prime Minister Mohammed Shia Al-Sudani during a ceremony attended by senior officials from both countries, including the US deputy secretary of energy James Danly.

    The contract included a five-year agreement for regasification services and LNG supply with extension options, featuring a minimum contracted offtake of 250 million cf/d.

    Ahmed Mousa said that “under the contract, the company is responsible for completing the facility as well as securing the agreed gas quantities from any source, in line with the specified terms”.

    He added: “Work is continuing according to the planned timelines to complete the project on schedule, as part of the Ministry of Electricity’s plans to keep pace with peak summer loads.”

    Although Iraq is Opec’s second-largest oil producer after Saudi Arabia, it is a net natural gas importer because its lack of infrastructure investment has meant that, until 2023, it flared roughly half of the estimated 3.12 billion cf/d of gas produced in association with crude oil.

    Iraq’s reliance on flaring associated gas instead of gathering and processing it has prevented the country from fully realising its potential as a gas producer and forced the Iraqi government to rely on costly gas and electricity imports from Iran.

    Recently, Iraq’s oil and gas sector has been disrupted by fallout from the US and Israel’s attack on Iran on 28 February and the subsequent regional conflict.

    Over recent weeks, Iraq’s oil exports have collapsed by about 80% amid problems shipping crude through the Strait of Hormuz.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577746/main.jpg
    Wil Crisp
  • Iraqi LNG import terminal raises questions about energy strategy

    27 April 2026

    Commentary
    Wil Crisp
    Oil & gas reporter

    Iraq’s first LNG import terminal is set to come online in early June, at a time when global LNG prices are likely to remain close to their highest levels in more than three years.

    The disruption to global oil and gas exports in the wake of the US and Israel’s attack on Iran on 28 February led to LNG prices soaring, with natural gas prices in Asia and Europe rising to their highest levels since January 2023 during March.

    So far, there has been little progress towards a diplomatic or military solution to reopen the Strait of Hormuz, and most analysts do not forecast significant price declines in the near term.

    On 24 April, the International Energy Agency (IEA) said that the combined effect of short-term supply losses and slower capacity growth could result in a cumulative loss of around 120 billion cubic metres of LNG supply between 2026 and 2030.

    While the IEA expects new liquefaction projects in other regions to offset these losses over time, it still believes the crisis will lead to prolonged tight market conditions through 2026 and 2027.

    This means that Iraq will likely have to pay elevated prices for imported LNG for some time to come – if it can receive shipments at all.

    The port of Khor Al-Zubair is located in the Arabian Gulf, and LNG shipments from the US or Australia would need to pass through the Strait of Hormuz before reaching the terminal.

    This will only be possible if a solution is found to the ongoing blockade of the shipping route.

    Investment debate

    Iraq’s project to develop a floating LNG terminal is estimated to cost $450m, and many in Iraq may question whether this was the best use of these funds.

    While it may have been difficult for Iraqi policymakers to foresee the attack by the US and Israel on Iran and its impact on LNG markets, Iraq had several strong options to enhance domestic energy security rather than turning to LNG imports.

    The most obvious of these was investing in infrastructure to enable it to utilise its domestic gas reserves.

    According to the World Bank’s 2025 Global Gas Flaring Tracker Report, in 2024, Iraq burned off more unused gas than any other country, except Russia and Iran, which ranked first and second, respectively.

    That year, an estimated total of more than 18 billion cubic metres of natural gas was flared in Iraq due to a lack of infrastructure to properly capture and process it.

    It is highly likely that projects to gather and process this gas would have been more reliable and cost-effective than investing in a new floating LNG terminal, which increases the country’s exposure to global LNG price fluctuations and shipping disruptions.

    Other options could have included developing domestic gas fields or investing in solar and battery storage projects, which have become increasingly affordable in recent years.

    The cost of solar panels has fallen by more than 95% over the past decade.

    Power shortfall

    As things stand, Iraq is likely to face severe electricity shortages this summer.

    On 21 April, Iraq’s Ministry of Electricity said it plans to produce 30,000MW this summer, well short of the predicted peak demand of around 55,000MW.

    Ahmed Musa, a spokesperson for the Electricity Ministry, told the state-run Iraqi News Agency that the shortfall will result in planned outages across the country.

    He also said that even meeting the 30,000MW target is contingent on sufficient gas supplies.

    If Iraq experiences the same level of power outages as last year – or worse – many are likely to view the $450m spent on an LNG import terminal as a waste of money and an expensive symbol of poor planning.

    Power cuts this summer could stoke unrest at a time that is already politically precarious due to the ongoing regional conflict.

    In recent years, electricity shortages have repeatedly fuelled protests in Iraq during the summer months, particularly in Basra, where blackouts and poor public services have driven people to take to the streets.

    If the Strait of Hormuz does not reopen soon, Iraq’s economic crisis will deepen, and electricity shortages are likely to further undermine the country’s stability.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577743/main.jpg
    Wil Crisp
  • Kuwait approves Doha desalination plant award

    27 April 2026

    Kuwait’s Central Agency for Public Tenders has approved the recommendation of the Ministry of Electricity & Water to award a KD114.28m ($371.5m) contract to supply, install, operate and maintain the second phase of the Doha seawater reverse osmosis (SWRO) desalination plant.

    A joint venture of Kuwait-based Heavy Engineering Industries & Shipbuilding Company (Heisco) and India’s VA Tech Wabag has been selected for the project, with the award understood to be pending final approval from the Audit Bureau.

    The project will deliver a production capacity of about 60 million imperial gallons a day (MIGD) and will include the desalination plant with full reverse osmosis trains, pre- and post-treatment systems, recarbonation equipment, booster pumps, and safety and filtration systems.

    The total project duration is 96 months. The Doha SWRO desalination plant is part of Kuwait’s broader programme to expand water production capacity and reduce reliance on thermal desalination methods.

    MEED previously reported that the Heisco/Wabag joint venture submitted the lowest bid. Bidders and prices included:

    • Heavy Engineering Industries & Shipbuilding / Wabag: $373.2m
    • Cox Water (Spain): $538.1m
    • Orascom Construction (Egypt): $568.4m

    In April 2025, MEED reported that Kuwait had retendered the contract for the facility after the ministry cancelled the initial tender in June 2024.

    The Ministry of Electricity & Water awarded South Korea’s Doosan Heavy Industries & Construction – now known as Doosan Enerbility – a $422m contract in May 2016 to build the 60 MIGD Doha 1 SWRO plant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577722/main.jpg
    Mark Dowdall
  • Firms prepare bids for 250MW Airtrunk data centre

    27 April 2026

     

    Contractors are preparing to submit commercial offers by 4 May for a contract to build a 250MW data centre in Riyadh.

    The project is being co-developed by Australian firm AirTrunk in collaboration with Saudi Arabia’s artificial intelligence (AI) infrastructure company Humain, which is owned by the Public Investment Fund (PIF).

    The bidders include:

    • El-Seif Engineering Contracting / Larsen & Toubro (local/India)
    • FCC / Alfanar Projects (Spain/local)
    • Albawani / Orascom (local/Egypt)
    • Nesma & Partners (local
    • James L Williams (UAE)
    • Alec (UAE)

    In October last year, AirTrunk and Humain announced a $3bn partnership to build data centres in Saudi Arabia, marking AirTrunk’s first move into the region.

    The firms said they would, along with AirTrunk investor Blackstone, “develop a long-term strategic partnership focused on financing, developing and operating next-generation data centres and AI infrastructure across the kingdom”.

    This was followed by Humain signing a $1.2bn financing agreement with the state-backed National Infrastructure Fund to support the expansion of AI and digital infrastructure projects in Saudi Arabia. The agreement was signed in January on the sidelines of the World Economic Forum in Davos, Switzerland.

    Humain said the deal will support its plan to develop up to 250MW of hyperscale AI data centre capacity in the kingdom.

    According to a joint statement, the data centres will use graphics processing units for AI training and inference, serving Humain’s customers locally, regionally and globally.

    The National Infrastructure Fund and Humain will also explore launching an AI data centre investment platform, with the two organisations acting as anchor investors to enable local and international institutional investors to back the scale-up of Humain’s AI programme.

    The National Infrastructure Fund is Saudi Arabia’s lead development financing partner for infrastructure and operates under the supervision of the National Development Fund.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/16577720/main.jpg
    Yasir Iqbal