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Trowers & Hamlins advises Jordanian government on LNG supply contract with Shell

Trowers & Hamlins advises Jordanian government on LNG supply contract with Shell

Together with Navigant, Mapstone and Tractebel Engineering, international law firm Trowers & Hamlins is pleased to have advised the Ministry of Energy and Mineral Resources of Jordan on a liquefied natural gas (LNG) sale and purchase agreement with Royal Dutch Shell.

The agreement, signed on 21 January 2015, guarantees a five-year supply of LNG to the Kingdom and over the term has a value of several billion dollars.

This deal follows an agreement signed by the Jordanian government in July 2013 to lease a Floating Storage and Regasification Unit (FSRU) from Golar LNG Limited, which is moored in a purpose-built structure near the Red Sea port of Aqaba.

From July 2015, Royal Dutch Shell will supply 150 million cubic feet of LNG per day to the terminal in Aqaba.  This LNG will cover around 25 per cent of the National Electric Power Company's daily needs for power generation. 

Trowers & Hamlins has worked closely with the Jordanian government since 2012 to assist in the implementation of the Kingdom's LNG import strategy.  Along with fellow consortium members Navigant, Mapstone and Tractebel Engineering, the firm advised on the project feasibility, time charter party agreement for the FSRU in Aqaba and on the subsequent tender process for the supply of LNG.

Tom Wigley, International Energy and Natural Resources partner at Trowers & Hamlins, commented:  "This contract is the final step in an ambitious strategy to diversify energy resources in Jordan and meet the increasing energy needs of the Kingdom.  Jordan imports about 96 per cent of its energy needs and has increasingly looked to LNG – not only as a cheaper and cleaner alternative to diesel and heavy fuel oil – but also to ensure security of supply following disruptions in the gas pipeline from Egypt.  We are very pleased to have been involved in this project since its inception."

Richard Bass, Director at Navigant, added:  "The execution of the LNG project’s first supply contract is a significant milestone for Jordan.  The LNG import terminal will enable Jordan to make significant savings on its energy import costs and greatly enhance fuel supply flexibility.  We are proud to have supported the Ministry of Energy and Mineral Resources validate the initial concept and assist in the project’s execution.  Our team is continuing to provide advice on the implementation of the project and we are looking forward to the commissioning of the terminal later this year."