June 23, 2023 [Jordan News]- During the Jordanian-Iraqi Business and Financial Forum, the chief executive officer of the Jordan Petroleum Refinery Company (JoPetrol), Abdulkarim Alaween, confirmed on Tuesday that the fourth expansion project will enable the refinery to refine 120,000 barrels of light Arab crude oil per day.
Alaween explained that the project aims to improve the quality of products in line with the latest Jordanian and European specifications to meet vehicle emission standards (Euro 5/V and Euro 6/VI).
Additionally, the project seeks to enhance energy efficiency and reduce greenhouse gas emissions, as required by the Ministry of Environment, the International Finance Corporation, and the Equator Principles.
The expansion project aims to improve air quality surrounding the refinery and throughout the Kingdom. It also focuses on enhancing water management, conservation, treatment, and recycling.
Moreover, the project aims to transition from using fuel oil to natural gas in refining furnaces and steam boilers.
Generating high-efficiency electricity, producing hydrogen
The project intends to generate high-efficiency electricity through a combined cycle power station using natural gas.
It will also produce hydrogen from natural gas. Furthermore, the project aims to meet the Kingdom’s demand for high-quality petroleum products at competitive prices.
It seeks to improve the environmental performance and energy efficiency of the existing refining units that will be retained after the expansion. Additionally, the project aims to convert heavy sulfur fuel oil into lighter high-value products such as diesel, gasoline, and aviation fuel.
Economic benefits
The CEO highlighted the economic benefits of the project, including the execution of work by local contractors. It is expected that the peak monthly direct employment during the project implementation phase will reach 6,500 job opportunities, with an average monthly direct employment of 5,000 opportunities.
Furthermore, the project will source quantities of materials from the local market, boosting the local economy.
Alaween reviewed the main stages of the project, including completed works and market research to determine requirements.
The project has selected refining technologies and licensed technology providers, and has prepared basic engineering design documents by refinery technology licensors. The Spanish company Tecnicas Reunidas has prepared the basic engineering design documents, while the Bankable Feasibility Study was also conducted by Tecnicas Reunidas.
The project’s advisors include the financial advisor (SCB Bank)/Dubai branch, the international legal advisor (Freshfields), the environmental advisor ECO & WKC, the insurance advisor AON, and the project management advisor (Technip).
Progress towards financial closure
Alaween mentioned that the investor package documents and bid documents for the design, supply, execution, and financing (EPCF) of the fourth expansion project have been prepared. Prequalification of EPCF coalitions has taken place, and the preferred coalition for the project has been selected.
Financial closure activities involve discussions with the preferred coalition regarding tax and customs exemptions, negotiations with investors, and negotiations with Export Credit Agencies (ECAs) in cooperation with the preferred coalition and their consultants for due diligence.
The activities, including due diligence for various aspects of the project, are expected to be completed in the last quarter of the current year.
According to Alaween, the Jordan Petroleum Refinery previously implemented three expansions between 1960 and 1983 to increase the refining capacity to 60,000 barrels per day.
In 2013, after opening the market for petroleum products in Jordan for competition, the company established a subsidiary called JoPetrol to serve as its marketing arm in the local market. JoPetrol currently holds the first position in the Jordanian transportation fuel market, with a volume of 30 million barrels per year.
The refinery also owns two other subsidiaries involved in the liquefied petroleum gas business and mineral oil production and marketing.
The authorized and paid-up capital of the Jordan Petroleum Refinery Company is JD100 million (100 million shares at JD1 per share). Its net profit after tax was JD105 million last year, compared to JD52 million in 2021.
The Jordan Petroleum Refinery Company, founded in 1956, is a public joint-stock company and owns the only refinery in Jordan. It began production in 1960 with a modest refining capacity of 7,500 barrels per day.
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