Oil prices are falling on…
As the aftershocks of the…
The Jordan Times has reported that Iraq and Jordan have agreed to begin planning the construction of an $18 billion pipeline that will carry oil from the southern city of Basra in Iraq, to the north-eastern port city of Aqaba in Jordan.
Jordan, one of the smallest economies in the Middle East, suffers from a lack of domestic natural resources and therefore relies on imports for more than 90 percent of its energy needs; equating to around 100,000 barrels of oil per day.
Energy imports by the kingdom of Jordan hit 19 percent of GDP in 2011, up from 9 percent of GDP in 2003, as an increase in electricity demand required larger volumes of fossil fuels. The country also saw its public debt rise rapidly due to its reliance on Egypt for its supply of natural gas.
It is hoped that the construction of the pipeline will help create 10,000 jobs, which will provide a big boost to the national economy, increase Jordan’s independence from other countries in terms of energy imports, and also earn the kingdom an extra $3 billion a year in revenue.
According to Khalaf Al Khalaf, the governor of Basra, the city and its surrounds currently account for about 70 percent of Iraq’s total oil production, pumping out around 2.3 million barrels a day. Al Khalaf stated that he expects Basra to be producing 17 million barrels a day by 2017, and that the new pipeline will be crucial for exporting this oil around the world.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com