[Important Update] Jordan’s Risha Gas Discovery: A Game Changer for Israel, Egypt, and LNG Markets?

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Today, the Minister of Energy and Mineral Resources, Dr. Saleh A. Al-Kharabsheh, held a press conference where he provided details about the new gas discovery in Risha field. He also outlined the development plan. Here are the updates:

1. Based on SLB high case estimates, gas in place is estimated at 14.6 trillion cubic feet and 6.65 trillion cubic feet can be extracted. In the base case, the discovery has 11.99 trillion cubic feet of gas where 4.67 trillion cubic feet can be extracted.

2. Development of the field will start immediately.  It will take 4 years for the first gas to come online.

3. The plan is to drill 70 wells by 2029.  Production is expected to increase from the current 45 million cubic feet to 150 million cubic feet.  Eight wells will be drilled in 2025. 

4. The development plan includes building a pipeline from Risha field to the Arab Gas Pipeline as shown in the map below. 

5. Total cost is estimated at $2.8 billion.

 It remains to be seen if the oil majors are interested in developing this field or whether BP will come back.  Regardless, the project will create opportunities for small companies.  We suspect that the pipeline will go to the Chinese since they are more efficient at building them than others. 

On November 7th, a senior official at Jordan’ ministry of energy revealed in an interview with Al-Mamlaka TV that recent studies indicate the presence of large commercial gas reserves at Risha gas field in Jordan. Mr.Bahjat Al-Adwan, director of Natural Resources at the Jordan’s Ministry of Energy, stated that the estimated commercial quantities are 9.4 trillion cubic feet or 266 billion cubic meters (bcm). These reserves are projected to meet local demand and potentially lead Amman to achieve self-sufficiency by 2030, contingent upon the pace of field development.

The extraction of these huge reserves could be a game changer for Jordan, which currently relies on imports for over 95% of its gas needs, primarily from Israel. This discovery has also the potential to set the stage for industrial growth in the kingdom in the coming years.  The impact on Israel, Egypt, and LNG markets and the geopolitical ramifications cannot be ignored. It could revive the ideas of shipping Eastern Mediterranean gas to Europe via pipelines or in the form of LNG as Israeli gas might end up stranded, especially if Jordan starts exporting gas to Egypt and Egypt is able to rejuvenate its natural gas production. 

In this article, we will provide an overview of:

·       Gas supply in Jordan and the significance of Risha gas field.

·       Gas consumption and key gas consuming sectors.

·       Outlook of the gas sector in Jordan upon the development of Risha gas field.

·       Regional and geopolitical ramifications of this gas discovery

Gas Supply in Jordan