NEPCO says Noble Energy was last option as debts hit JD5.5b

AMMAN — The National Electric Power Company (NEPCO) on Sunday said that it had no choice but to sign the gas deal with Noble Energy given its accumulated debts that hit JD5.5 billion.

NEPCO Director General Amjad Rawashdeh said that the disruption of the Egyptian gas supply to Jordan had forced the company to look for alternatives from neighbouring countries through pipelines, adding that the Israeli gas was the "only choice available due to regional circumstances", the Jordan News Agency, Petra, reported.

Rawashdeh added that NEPCO’s accumulated debts have amounted to JD5.5 billion with loan interests and debt service reaching around JD120 million annually, according to Petra.

 He also said that the liquefied natural gas terminal in Aqaba has helped NEPCO reduce its financial losses but it remains economically and technically unfeasible given the international price fluctuation and the limited storage capacity, according to Petra. 

Explaining that the agreement with Noble Energy has no penalty clause per se but it stipulates a fixed fine depending on the actual damage caused to other side. He said that the agreement stipulates a fine up to $1.5 billion on NEPCO and $1.2 billion on Noble Energy if either party breaks the deal during the first five years it goes effective. 

The director also said that the fine goes down to $800 million and $600 million on NEPCO and Noble Energy respectively during the second five years of the agreement and $400 million on both parties during the third five years. 

He explained that the fine on NEPCO is higher than that on Noble Energy because the latter has spent $3.5 billion in infrastructure investments in  Israel’s offshore Leviathan field, according to Petra.