Israeli energy shares fell Tuesday after the London-based newspaper Asharq Al Awsat reported that Jordan’s King Abdullah II had ordered a review of his country’s $10 billion agreement to import Israeli natural gas.
Citing senior Jordanian political sources, the Saudi-owned paper said the king made the decision “in a technical report that examines Jordan’s interests from the continuation or the freezing of the agreement.”
The sources told the paper the king was using the report to pressure Israel to lower its price for the gas and/or to deflect pressure from Jordan’s parliament to cancel the deal.
Jordan’s National Electric Power Company signed the agreement with Noble Energy, the Texas-based company that serves as operating partners for Israel’s Leviathan gas field, in September 2016.
The 15-year agreement calls for NEPCO to buy between 3 billion and 3.5 billion cubic meters of gas annually from Leviathan, beginning in the last quarter of 2019, after the pipelines are completed.
The agreement has been hailed in Israel as part of a growing regional energy partnership that includes Israeli gas exports to Egypt and will advance Israel’s ties with its Arab neighbors. In Jordan, however, it has elicited protests on the grounds that it would “normalize” ties with Israel at a time when no progress has been made on a peace agreement with the Palestinians.
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On the Tel Aviv Stock Exchange, shares of Ratio, which has a 15% stake in the offshore Leviathan field, were down 1.9% at 2.98 shekels (83 cents) in late afternoon trading. Delek Drilling, which has a 45.3% holding, was down 2.4% at 10.90 shekels. Noble was up in New York 1.7% at $27.42 in premarket trading.
In response to the news, a spokesman for the Leviathan partnership said: “The project is moving forward according to its planned timetable. The gas pipeline is in the final stages of construction both on the Israeli and Jordanian sides. Leviathan gas is expected to begin flowing by the end of the year in line with the agreement signed.”
Khaled Bakkar, the head of the finance committee in the Jordanian parliament, told Asharq Al Awsat that in addition to being “blatant normalization” with Israel the agreement is “economically weak” based on the feasibility studies and could only benefit Israel.
The lower house of the Jordanian parliament declared its “utter rejection” of the gas deal in a March 27 vote. House Speaker Atef Tarawneh claimed broad public opinion backed rejecting the deal with the “Zionist entity” and demanded it be “canceled at any cost.”
Deputy Prime Minister Rajai Muasher said at the time the government would refer the matter to the kingdom’s constitutional court and make a decision based on its opinion.
The 2016 agreement predated major Egyptian natural gas discoveries that have enabled Egypt to resume exports to Jordan. Commercial quantities of Egyptian gas, delivered via a Sinai pipeline, began arriving in Jordan at the start of this year.
Egypt began supplying natural gas to Jordan in 2004 but suspended deliveries to the kingdom and to Israel seven years later, in the wake of repeated sabotage of the pipeline and a desire to retain diminishing reserves for local consumption.