IPA Advisory Limited a leading independent advisory practice

Levant LNG Case Study

Project:
Importing LNG into the Jordanian power system

Client:
Levant LNG

Country:
Jordan

IPA was engaged by Levant LNG, a prominent LNG operator, to assess the integrated net benefits of importing LNG via a Floating Storage Regasification Unit (FRSU) situated in Aqaba Jordan.  The project was initiated during a period of increasing natural gas supply interruptions from Egypt, as supplies from the Arab Gas Pipeline fell below contracted levels leading to an increasing reliance on expensive oil-fired power generation to meet power demand.

LNG to power was considered a short to mid-term solution while longer term options such as oil shale developments and nuclear power where explored.  The client was exploring the option of importing LNG to support the development of the domestic power sector and reduce the overall cost of power procurement in Jordan, as part of its wider energy strategy.

IPA was engaged as a market advisor to assess the cost savings under various fuel to power scenarios.  To carry out this task, IPA developed an integrated economic model to determine the least cost generation option to the Jordanian power sector based on forecasted electricity prices and fuel deliveries.  IPA also assessed the costs of Egyptian gas supply interruptions including an assessment of available pipeline resources and indicative supply agreement terms.

Further, IPA evaluated a number of fuel supply scenarios and utilised the developed market model to measure the economic benefit (this included a measurement on all factors, e.g. CO2 reductions) resulting from the utilisation of LNG into the Jordanian energy system.

The results of the integrated analysis assisted the client with assessing the economic benefits of LNG imports and provided assurance to project investors regarding the proposed project’s viability.