A natural way to unite
The Arab world has begun to connect economically, one gas molecule at a time, writes Nevine Khalil
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In Taba, Mubarak and Abdullah pushed the butoon to begin Egyptian natural gas exports to Jordan; and in Aqaba, they opened the valve allowing the fule to flow freely
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Egypt exported its first batch ever of natural gas to Jordan on Sunday at a ceremony attended by President Hosni Mubarak and Jordan's King Abdullah.
But Jordan is only one link in a natural gas grid that will eventually include Syria and Lebanon by the year 2006. In its final stage, the pipeline will also feed into the European market through eastern and central European countries, as well as Turkey. It is hoped that through finding common economic interests and working on joint projects such as this one, the Arab world will achieve a strong economic base on which to cement Arab ties and interests.
The Taba-Aqaba pipeline will transfer 1.1 billion cubic metres of liquefied natural gas (LNG) a year from Egypt to Jordan. It is only the first of four stages of a project to extend the gas grid to Europe. The section inaugurated on Sunday cost $200 million to construct and will carry Egyptian natural gas from the Mediterranean Sea across 248 kilometres in Sinai to the Red Sea. The pipeline then travels 16 kilometres underwater, mostly at a depth of 850 metres, to Aqaba.
Mubarak first met Abdullah in the Egyptian resort city of Taba near the Gulf of Aqaba for the inauguration ceremony, where they pressed a button on a computer allowing Egyptian natural gas to flow. The two leaders, accompanied by a large entourage of ministers and officials from both countries, then crossed by boat to the Jordanian port of Aqaba. There, they turned a large wheel, opening the pipes for the natural gas to arrive in Jordan.
The first stage of the project is expected to bring Egypt $70 million in revenues per year, $200 million after two years and at least $500 million within five years, according to Minister of Petroleum Sameh Fahmi. At the same time, the Taba-Aqaba link will help meet Jordan's demand for energy which is growing by nearly three per cent a year.
An Egyptian consortium, the East Gas Egyptian Company, won the bid to construct the second stage of the natural gas network according to the Build, Operate and Transfer (BOT) system. Phase two will travel 390 kilometres from Aqaba to northern Jordan and will be funded by an Egyptian-Jordanian company under the name of Fajr, at a cost of $250 million.
In phase three, estimated to begin in 2005, both the Damascus-based Arab Company for the Transportation and Marketing of Natural Gas and the Beirut- based Arab Authority for Natural Gas will be created to bring the pipeline to Syria, Lebanon and the Turkish-Syrian border. From there, stage four will eventually travel to Turkey and other parts of eastern and central Europe. All in all, the Egypt-Lebanon pipeline, which is being financed by several Arab funds, is estimated to cost around $1 billion to construct.
Egypt has reserves of 60 trillion cubic metres of natural gas and is aiming to become one of the world's top 10 natural gas exporters in the next four years. At the end of 2004, Egypt will begin exporting LNG to Spain and Italy. By 2005, other export markets will include France and the US.
For Fahmi, the Arab natural gas pipeline represents a qualitative transformation in Egypt's petroleum industry, since Jordan is the first country to import natural gas from Egypt. "This is also a valuable economic and strategic project for the Arab world," he told Mubarak and Abdullah in his presentation.
Jordan's Minister of Energy and Petroleum Mohamed Al-Batayna described the project as one of the "most significant Arab projects. It is an economic vein which connects many Arab countries together." Al-Batayna said it further promoted relations between Egypt and Jordan and will provide his country with a clean source of energy for the industry sector. He added that Jordan, like Lebanon, is "an importer of fuel, which requires us to diversify our sources of energy".
The Arab natural gas grid was approved in mid-December 2000, when Egypt, Syria and Lebanon signed a memorandum of understanding for the project. Jordan joined the blueprint for the pipeline in February 2001.
