The government has earmarked a substantial sum of JD27 million within the Ministry of Energy and Mineral Resources' budget for the years 2023, 2024, and 2025. This allocation is designated to facilitate the provision of natural gas to the Kingdom's industrial zones. The initiative comes as part of a broader strategy to diversify energy sources and promote the use of natural gas, aiming to reduce energy costs for consumers and enhance industrial performance. As part of this program, the Ministry of Energy will take the necessary steps to deliver natural gas to cities and industrial areas. The primary goal of this undertaking is to encourage the industrial sector to adopt natural gas as an energy source, and it also encompasses covering the expenses associated with delivering natural gas to industrial cities. The move aligns with a 2022 annual report by the ministry, which underscores the importance of leveraging natural gas across various sectors. To implement the infrastructure required for the successful delivery of natural gas to industries, a partnership has been forged between the Jordan Industry Chamber and the Jordanian Egyptian Fajr for Natural Gas Transmission and Supply. This partnership will facilitate the construction of essential infrastructure, including connecting the main natural gas pipeline to industrial facilities, all the way to the factory site. The agreement encourages direct contracts between end-users and contractors, streamlining the process. The procedure for obtaining natural gas supply is detailed, commencing with the submission of an application containing information on fuel consumption and required gas quantities. The process continues through the completion of the project's construction and other relevant phases. Furthermore, a preliminary feasibility study for the development of natural gas distribution networks in Amman and Zarqa has been finalized. The project's objectives encompass creating a cost-effective energy source for consumers, improving energy cost-efficiency, establishing a comprehensive natural gas distribution network, generating employment opportunities for local Jordanian labor, and enhancing the Kingdom's overall energy performance. The government's commitment to this initiative is underscored by a decision taken in 2022 by the Cabinet, which endorsed that the tax applied to natural gas be divided into 3.5% as a special tax and 3.5% as a general value-added tax. This decision was made following a three-year grace period for companies transitioning from using fuel oil to natural gas, and aligns with the Cabinet's 2018 decision to exempt new companies undertaking this shift from the special natural gas tax for a duration of three years. The process of delivering natural gas to industries from the main gas pipeline to the factory site is regulated by specific criteria and a comprehensive mechanism, with the aim of facilitating direct contracts between end-users and contractors. Key provisions of this mechanism include enabling any factory to contract with any engineering firm (contractor) for designing and executing the infrastructure required for delivering natural gas to industries. This infrastructure includes connecting to the main natural gas pipeline and reaching the end-users (sub-facilities), provided the company specializes in gas stations (high pressure) and pipelines (high pressure) and possesses experience in designing and executing these works. The Ministry will assess these contractors through an accredited consulting company, with the factory bearing the associated costs. Upon the selection of a qualified contractor, a confidentiality agreement will be signed to ensure secure information exchange as per the Ministry's approved protocol. The end-users will be responsible for all necessary actions during the execution phase, including procurement, works, customs, and more. They will also bear the full tax impact arising from demonstrating the project's value within Fajr's assets, based on the mechanism for gas supply to industries. Moreover, Fajr will handle the maintenance and operation of sub-facilities at the expense of the factory, taking into account the financial impact borne by the end-users in tax payments and sub-facility consumption. The mechanism also mandates that factories establish gas stations at locations serviced by roads and provide the project with the required facilities and services. Following the completion of the project, the technical consultant will prepare the final report to certify the project's completion, and the ministry will issue a certificate of project completion accordingly. It should be noted that the mechanism excludes any work related to facilities implemented or to be implemented by Fajr for natural gas delivery to factories? and does not permit factories to undertake direct technical interventions on the main gas pipeline and its facilities. Factories will be liable for all damages resulting from their actions, whether to the ministry, Fajr, third parties, public or private property, the gas pipeline, or other end-users.

Source: Jordan News Agency