Saxo Bank said Jordan can significantly cut its energy costs over the coming years by relying extensively on Liquefied Natural Gas (LNG) and solar power, whose prices continue to go down.
“The main thing for gas in the coming years is that the cost of transforming it into liquid and then turning it back into gas, and the transportation costs, are all coming down,” said Ole Sloth Hansen, head of commodity strategy with the Copenhagen-based online forex brokerage.
A newly-launched LNG terminal in Aqaba has helped the Kingdom slash its energy bills after it spent several years relying on expensive heavy fuel to generate electricity, a move which plunged the National Electricity Power Company (NEPCO) into the red.
Hansen said Jordan should continue to develop solar energy, stressing the technology was rapidly becoming cheaper and more effective.
As for oil prices, Hansen expected it to rise further beyond the $50 point, but will most probably not go back to the $100 per barrel mark. For oil consumer countries, the good news is there is no going back to the bad days when prices were very high because the global market is more balanced, he stressed, something that oil-producing countries should adapt to.
“We have to expect that the price of oil over the next two years will rise further from its current levels, but it will eventually stabilize quite a bit lower than where it was between 2011 and 2014,” Hansen told Venture.