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
  • Egypt seeks consultant for major inland waterway study

    18 November 2025

    Egypt’s Transport Ministry has issued an expressions of interest (EOI) request, through the River Transport Authority, to appoint a consultancy firm for a study on a proposed inland waterway linking Lake Victoria to the Mediterranean.

    The consultant will carry out basin-wide data collection and prepare a strategic environmental and social assessment for the project.

    The assignment includes hydrological, topographic, bathymetric and geotechnical surveys across the Nile Basin.

    The consultancy is expected to run for about 15 months, starting in February or March 2026.

    Firms must submit EOIs by 6 December.

    The study forms part of the Vic-Med project, a multi-country plan to establish a continuous inland waterway from Lake Victoria to the Mediterranean Sea.

    The masterplan project aims to reduce transport costs for landlocked countries and provide a lower-carbon alternative to road freight along the Nile corridor

    The work is part of phase two, part one of the feasibility study, funded through a $2m grant from the New Partnership for Africa's Development – Infrastructure Project Preparation Facility (NEPAD–IPPF), the African Development Bank’s (AfDB) fund for early-stage project development.

    The first phase, completed in July 2019 with $650,000 in AfDB funding, developed the project’s legal and institutional framework and launched two regional inland water transport programmes.

    The second phase, valued at $11.7m, covers updated feasibility studies and expanded technical assessments supporting detailed engineering design and cost-benefit analysis in the next stage. 

    This phase also covers the establishment of a regional operating unit for the project in Cairo.

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15108707/main.jpg
    Mark Dowdall
  • Kuwait to make decision on four oil pipeline packages

    18 November 2025

     

    Kuwait is evaluating bids on four packages for a major pipeline project after prices were submitted earlier this month, according to industry sources.

    The four separate packages cover pipeline work in the north, south, east and west regions of the country, sources said.

    Although the total of all bids submitted by Kuwait-based Alghanim International General Trading & Contracting is the lowest at KD419m ($1.4bn), the company submitted the lowest individual bid on only one package, located in northern Kuwait.

    Its bid for the north Kuwait package was KD149.8m ($488.3m).

    Mechanical Engineering & Construction Company submitted the lowest bids for pipeline work on two packages located in the south and east of the country. 

    Both of these bids were valued at KD97,868,394 ($319m).

    Al-Dar Engineering & Construction Company is the low bidder on the fourth package, for pipe work in western Kuwait, submitting a bid of KD64,825,398 ($211.3m).

    Together, all four contracts are expected to be worth about $1.4bn when awarded.

    The scope of all four packages focuses on developing new flowlines and connecting pipelines for oil-producing wells and water wells.

    In some cases, companies are also required to replace old flowlines.

    The contracts are based on work orders, so when KOC needs to connect wells it will issue a request for work execution, industry sources said. 

    Kuwait is trying to boost project activity in its upstream sector.

    The country’s national oil company, Kuwait Petroleum Corporation, is aiming to increase oil production capacity to 4 million barrels a day (b/d) by 2035.

    In August, Kuwait announced that it was producing 3.2 million b/d.

    Earlier this month, KOC said it was planning to spend KD1.2bn ($3.92bn) on its exploration drilling programme through 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15106496/main.png
    Wil Crisp
  • Indian firm wins Oman chemicals project EPC contract

    17 November 2025

    Register for MEED’s 14-day trial access 

    Indian contractor Nuberg EPC has won a contract to perform engineering, procurement and construction (EPC) works on a project to build chlor alkali and calcium chloride plants in Oman for privately-owned Al-Ghaith Chemical Industries.

    The project involves expanding Al-Ghaith’s existing chlor alkali plant in Sur Industrial City, by adding 120 tonnes a day (t/d) of capacity, taking the unit’s total output capacity to 190 t/d. The project also involves building a calcium chloride plant that will have a production capacity of 80 t/d.

    Nuberg EPC said the contract is being executed on a lump sum turnkey basis, with its scope covering design, front-end engineering and design (feed), detailed engineering, procurement, fabrication, construction, commissioning and handover.

    Project execution is already under way, with completion targeted within 19 months, Nuberg EPC said.

    The project marks the second phase of Al-Ghaith’s integrated chemicals complex in Sur and represents a first-of-its-kind large-scale chlor alkali expansion in Oman.

    Nuberg EPC also performed EPC works on the original chlor alkali plant, which has a capacity of 70 t/d.

    In addition to the Oman project, Al-Ghaith has, in the previous decade, also brought on board Nuberg EPC for its chlor alkali and calcium chloride plants in Abu Dhabi. Those contracts covered the commissioning of a 60 t/d chlor alkali plant that was later expanded to 120 t/d, and the execution of a 125 t/d calcium chloride plant and a 50 t/d carbon dioxide plant.

    Nuberg EPC has also executed the expansion of a 45 t/d chlor alkali plant and a greenfield 80 t/d calcium chloride plant for Oman Chlorine in Sohar, increasing the total chlor alkali output capacity to 75 t/d.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/15104096/main5048.jpg
    Indrajit Sen
  • Egypt starts production from strategic gas field

    17 November 2025

    Egypt has started gas production from the West Burullus field in the Mediterranean Sea, after connecting the first wells to the national gas grid, according to a statement from the country’s Petroleum & Mineral Resources Ministry.

    Productivity testing showed an output rate approaching 45 million cubic feet a day (cf/d).

    Kareem Badawi, Egypt’s Petroleum & Mineral Resources Minister, said he intends to accelerate development of the field and confirmed that work is under way to connect two additional wells, with the aim of increasing production to 75 million cf/d in the coming months.

    He added that the ministry aims to cut the county’s gas import bill by boosting domestic production.

    The operator of the concession is Cheiron, an Egyptian independent exploration and production company.

    Egypt’s oil ministry said in its statement that the West Burullus field development project represents a model for future integrated projects and investment plans.

    It said that a range of domestic and foreign companies are involved in bringing the field into production.

    In February, a banking consortium led by Banque du Caire, alongside Arab International Bank, Al-Baraka Bank Egypt and Saib Bank, arranged $75m in syndicated medium-term financing for Cheiron Egypt Delta, a subsidiary of the Cheiron Group.

    This financing will help cover part of the investment costs for the gas field development project.

    At the time, Cheiron said that the financing will provide up to 45.5% of the total $165m investment required for the project.

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15102295/main3406.jpg
    Wil Crisp
  • Major Iraq refinery project stalls

    17 November 2025

     

    Construction has yet to start on Iraq’s Al-Faw Investment Refinery project due to a range of problems, according to industry sources.

    In May last year, a statement released by the Iraqi Prime Minister’s Office said that Iraq’s state-owned Southern Refineries Company and China National Chemical Engineering Company (CNCEC) had signed a contract to develop the project.

    Iraq’s Oil Ministry previously said the project would be worth $7bn-$8bn.

    One source said: “This project is failing to make progress despite the efforts of senior political figures in the country.”

    A meeting was chaired by Iraqi Prime Minister Mohammed Shia Al-Sudani in August this year to discuss and try to resolve the problems that are stopping the commencement of construction, according to industry sources.

    It is believed that financing remains a key obstacle for the project.

    The Al-Faw project is part of the Iraqi government’s plan to increase Iraq’s refining capacities, attract foreign investment and increase the production of petroleum products domestically.

    The refinery will have a capacity of 300,000 barrels a day and will produce oil derivatives for both domestic and international markets.

    The project will be carried out in two stages.

    The first phase will involve refining operations, while the second will involve constructing a petrochemicals complex with a capacity of 3 million tonnes a year.

    The project also includes the construction of a 2,000MW power plant and the establishment of the Al-Faw Academy for Refinery Technology, to train 5,000 Iraqi workers that will eventually work at the facility.

    Hualu, a subsidiary of CNCEC, signed a preliminary principles agreement for the project in December 2021.

    At the time, Iraq’s Oil Ministry said that the project would have a value of $7bn-$8bn.

    Due to material price inflation since December 2021, some insiders believe that the project value may now be significantly higher.

    READ THE NOVEMBER 2025 MEED BUSINESS REVIEW – click here to view PDF

    Mena players up the ante in global LNG production race; Investment takes UAE non-oil economy from strength to strength; Project finance activity draws international lenders back to market

    Distributed to senior decision-makers in the region and around the world, the November 2025 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/15102287/main.jpg
    Wil Crisp