US embassy cable - 03AMMAN1234

C O N F I D E N T I A L AMMAN 001234 
 
SIPDIS 
 
E.O. 12958: DECL: 02/24/2013 
TAGS: EPET, EAIR, ETTC, JO 
SUBJECT: DCM'S MEETING WITH ENERGY MINISTER BATAYNEH 
 
Classified By: A/DCM Doug Silliman, reasons 1.5 (b,d) 
 
1.  (u)  Following are info items from the DCM's February 24 
meeting with Energy Minister Mohammed Batayneh: 
 
2.  (c)  Gasoil shortage:  Due to unseasonably cold weather, 
local consumption of gasoil and fuel oil has risen higher 
than expected.  Normally, Jordan stockpiles gasoil and fuel 
oil reserves in the summer for winter use, but the heavy 
demand this winter has led to a shortfall in stocks. 
Batayneh said he was issuing a tender to procure an 
additional 20,000 tons of gasoil to meet the additional needs. 
 
3.  (sbu)  Jet Fuel Price Hike:  Batayneh confirmed local 
press reports that the GOJ had increased jet fuel prices.  He 
noted, though, that the hike only applied to foreign 
commercial carriers; that the new price was still below the 
price in 2000; and that the new price was still below the 
average price of jet fuel in the region. 
 
4.  (c)  Request for Oil/Trade Protocol Increase:  Batayneh 
denied recent local press reports that Jordan had requested a 
10% increase in quantities shipped under the Jordan-Iraq oil 
protocol for 2003. 
 
5.  (sbu)  Independent Power Project:  Despite a pullout in 
late 2002 by Tractebel from the Independent Power Project in 
Al Samra, Batayneh said the project was now back on track. 
He said a new RFP had been sent to prospective investor 
groups headed by Saudi AG, ABB, CCC, and a U.S. firm, 
Northwest.  Batayneh said he expected the tender to be 
awarded by the end of April 2003. 
 
6.  (c)  Iraq-Zarqa Oil Pipeline:  Batayneh said financial 
details were now being submitted by firms interested in 
bidding on the oil pipeline.  He said he hoped to have the 
tender awarded in March (note: this project has been 
re-tendered at least three times after bidders failed to 
commit to financing citing political risk factors.  End 
note.)  Batayneh confirmed that the terms of the RFP include 
building of infrastructure on the Iraqi side of the border 
(storage tanks and a feeder facility for tanker trucks) and 
turning over the facilities to the Iraqi government prior to 
the beginning of commercial operations.  He admitted that 
such a provision might complicate the bidding process in the 
current environment. 
 
7.  (c)  Press Management:  Batayneh noted that managing 
press interest in the oil sector in the run-up to possible 
military activity in Iraq was becoming increasingly 
challenging.  He said that, despite the fact that Jordan is 
comfortable with its levels of reserves, he could not control 
rumors on the street that gasoline and diesel rationing was 
imminent - rumors he said were patently false.  He said it 
would be critical in the coming weeks to keep oil issues out 
of the press, for fear that Iraq might seize on mounting 
public concern and cut off access to oil earlier than a 
conflict scenario would allow for.  On this front, he said he 
had the full backing of the cabinet to make himself the only 
point of contact for the press on oil issues. 
GNEHM