Luxembourg, 14/06/2004 (Agence Europe) - The European Investment Bank (EIB) has decided to lend EUR 100 million to EGAS (Egyptian Natural Gas Holding Company) for the construction of a 393 km gas pipeline between the north and south of Jordan (between Aqaba and Rehab), allowing Egyptian natural gas to be brought to major power plants, industries and consumers throughout Jordan. The gas pipeline is also known as the "Arab gas pipeline" or "Jordanian gas transmission pipeline".
The project, of a South-South regional kind, is among the priority projects of the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) and is a prime example of its catalyst role in investment in the Mediterranean partner countries. The EIB stresses in a press release that, in a context of high oil prices, the gas pipeline will have economic advantages for Jordan and Egypt, but also for other countries of the region. In Jordan, the project will contribute to lowering the cost of electricity production and diversifying the country's energy system. Jordanian industry will benefit from a lower cost of electricity and will be able over time to adopt internationally competitive gas based technologies. Also, this conversion has very beneficial effects on the environment as it will significantly reduce polluting emissions.
Egypt will benefit from upstream activities and receipts from gas sales, shared to a certain extent with European companies and other international companies taking part in exploration and production. The project is also a major regional move forward in the Euro-Mediterranean zone, in so far as it establishes trade in gas between Egypt and Jordan, and opens up the potential to include Syria and Lebanon when the pipeline is extended in the future. Subsequent phases of the project would enable onward connections to Turkey and the European gas system.
The operation underpins FEMIP's continuing support to Egypt to develop, through private and public sector investment, its promising gas sector following the important gas discoveries made in the country over the past few years. The structure of the operation underlines, moreover, the key role which EGAS and its subsidiaries - important beneficiaries of EIB support since 1998 - play in the country's policy to foster natural gas exports in order to generate foreign exchange reserves.