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Jordan set to tap oil shale potential


By Taylor Luck

AMMAN - Progress in developing and utilising the Kingdom’s oil shale resources is under way, according to the Natural Resource Authority (NRA), which projects commercial oil shale production within the next decade.

According to NRA Director Maher Hijazin, the government will soon sign a major deal with Royal Dutch Shell Oil, which Prime Minister Nader Dahabi referred to during his meeting with lawmakers late last month.

“This will be a long-term project in several various phases,” Hijazin told The Jordan Times, adding that under the agreement, Shell will survey and develop 22,000 square metres of land, nearly one quarter of the country, in the central and southern regions of the Kingdom. The investment will be transferred to the government after the end of the concession.

Under the potential concession agreement, which is expected to be between 15 and 20 years, Shell will use their patented In-situ Conversion Process, under which the ground is heated over several years, to extract oil shale in oil form, according to Hijazin.

Shell representatives were unavailable for comment.

Meanwhile, progress is under way for oil shale extraction in the western and southern parts of the Kingdom, where this resource is closer to the surface and more suitable for mining and retorting.

Under separate agreements with the NRA, Estonian Eesti Energia, Brazilian firm Petrobras, Jordanian-British Jordan Energy and Mining Limited (JEML) and a Saudi firm are all currently examining separate blocks in Al Attarat and Lajoun areas for oil shale extraction.

“All the feasibility studies are already under way. The Estonians have submitted their report and the rest are scheduled to finish soon,” Hijazin said, adding that concession agreements between the NRA and the four companies are expected to be signed by the end of the year.

“Under these agreements, we will have commercially viable oil shale within the next 10 years,” he added.

According to Eesti Energia’s feasibility study, released earlier in May, there is the potential to produce 36,000 barrels of oil a day from just one of the Kingdom’s 20 locations rich in oil shale.

This has spurred enthusiasm for Eesti Energia, which has had decades of experience in Estonia. There, a large portion of the country’s needs are generated from burning oil shale.

“Jordan has a very strong potential. There are plentiful resources, although it needs further studying, and, importantly, it is easily mineable,” Harri Mikk, a member of the Eesti Energia management board, told The Jordan Times Wednesday.

“Jordan can easily produce hundreds of thousands of barrels a day from oil shale, perhaps a million barrels a day, potentially,” he added.

Under a deal signed by the company and the Ministry of Energy and Mineral Resources earlier this year, Eesti Energia will aim to develop a 600-megawatt power plant utilising oil shale. The cost, according to Mikk, would come at an estimated $1.8 million per megawatt, potentially a $1 billion price tag.

A switch to power plants operated by oil shale, however, would more than offset costs by reducing Jordan’s energy bill by at least 40-50 per cent, according to the National Electric Power Company.

The Kingdom’s oil shale resources, although big on potential, are not without their challenges, according to the Estonian energy expert.

“The oil shale is high in sulphur content, higher than Estonia, which creates a specific challenge in terms of oil quality,” he said, adding that with high levels of sulphur and nitrogen, extracted deposits will need extra processing before attaining crude oil quality.

“Jordan’s oil shale is not an immediately marketable product - it needs to be upgraded before going to a refinery and used as fuel,” Mikk said.

Mikk noted that Eesti Energia expects to complete concession negotiations with the NRA by the end of this year, before starting work next year.

JEML Director Munther Akroush told The Jordan Times that his firm is optimistic about the potential of resources in Lajoun, for which the firm is completing its environmental impact study.

“We think we have a billion barrels of oil equity in the ground,” Akroush said, adding that JEML projects to have a commercially operational plant by 2012 with the capacity of 15,000 barrels of oil a day.

He noted that although retorting is a water-demanding process, requiring three barrels of water to one barrel of oil shale, the water resources needed for production are low quality.

“We are not talking about potable water. Our technology adopts low quality salty water, or brackish water, so as not to use limited water resources,” he noted, adding that expansion of the sector will grow rapidly in the next several years.

“Once the technology is established, you can expand horizontally, it is practically unlimited,” he said, predicting that the Kingdom could produce 100,000 barrels of oil from oil shale within five years of operating its first processing plant.

Mikk agreed.

“At the end of the day, it could be a much bigger industry than previously thought,” he said.

According to NRA, some 40 billion tonnes of oil shale exist in 21 sites concentrated by the Yarmouk River, Buweida, Beit Ras, Rweished and Karak, Madaba and Maan districts.

While the resource can be found as shallow as 40 metres below the surface in the west and south, in the east and north of the Kingdom, oil shale is at very deep levels, some 900 metres, and cannot be mined.

7 August 2008

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