Jordan Petroleum Refinery Company has been the sole oil refinery in Jordan since opening in 1961. Today, the refinery assists in meeting the Kingdom’s energy demands through the production and importation of LPG, as well as by refining crude oil imports. Abdel Karim Alawin, CEO of JPRC, tells us his plans to conduct a $1.6 billion expansion.
What are the objectives of the refinery’s expansion?
The expansion has three objectives. One of them is quality improvement, such as to reduce diesel sulfur content. The second is to convert surplus materials, namely heavy fuel and oil, into lighter and more refined products. This is because since 2015, the power sector has been mainly fed by natural gas, leading to a build up of heavy fuel oil. The final objective is to increase capacity to serve the nation’s growing energy needs. Indeed, over the past five to six years, petroleum consumption has risen 3% annually.
Why is this expansion an attractive investment?
We are right at the center of consumption. The refinery is located deep inland, so anything consumed is done so within a radius of 50 kilometers. Anybody who wants to compete with the refinery has to import the fuel through Aqaba, and then transport the product 350 kilometers to Amman. Furthermore, the size of the petroleum market in Jordan is less than 40 million barrels a year. This does not justify building another refinery, so there is no risk of somebody else building a new one.
How can JPRC support regional rebuilding efforts?
The southern part of Syria is no more than 70 kilometers away from the refinery, versus their refineries on the Mediterranean, which are more than 250 kilometers. We are also closer to the western part of Iraq than refineries in Baija.
What kind of partners are you looking for this project?
We have contracted Ernst & Young to assess financing options, whether through financial institutions, equity partnerships, or engineering and construction contractors. All of these are on the table. JPRC constitutes a real investment opportunity because of our unparalleled foothold in Jordan’s energy market and proximity to large consumer bases. Certainly, this project is of extreme importance for Jordan.