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Jordan government rocked by legal challenges over secret gas deal with Israel

New details of controversial agreement has brought pressure on Amman, with politicians and activists looking to tear it up
The SSCV Thialf crane vessel pictured on 31 January 2019 following work on the Leviathan natural gas field in the Mediterranean Sea (AFP)
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Amman

A raft of legal challenges filed across Jordan has placed the kingdom’s latest controversial gas deal with Israel in jeopardy, and placed greater strain and uncertainty on the government of Prime Minister Omar al-Razzaz.

After an earlier deal sparked protests, Jordan secretly signed another agreement in 2016 to purchase even more of its neighbour’s natural gas, however this latter deal is now causing uproar after details of it emerged.

According to the agreement, US-based Noble Energy and Israel’s Delek Group were to supply $10bn worth of gas from the massive offshore Leviathan field to Jordan’s state-owned National Electric Power Company (NEPCO) over 15 years.

But earlier this month, Jordanian MP Saleh Armouti, who obtained a copy of the agreement and shared it with the media, said the public had been misled by the government over the deal, and that despite its insistence that the agreement cannot be cancelled, there are several ways out for Amman.

Armouti’s insistence that the deal contains legal loopholes has mobilised activists in the "National Campaign to Overturn the Gas Deal with the Zionist Entity" protest group, a coalition of professional unions, opposition parties and lawyers that has been pursuing the issue since 2016.

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In courts in the cities of Irbid, Madaba, Amman, Zarqa and Karak, around 220 lawsuits were filed by lawyers on behalf of Jordanians free of charge, in an attempt to put an end to Jordan’s purchase of Israeli gas. Lawsuits began to be filed on Sunday and are set to continue up to Thursday.

According to Hisham Bustani, the campaign’s coordinator, in the lawsuits the group is asking the government four things:

First, a halt to any legal and business dealings related to the deal, including work such as the laying of pipes.

Second, cancellation of all land acquisitions undertaken for the project and for land already seized to be handed back to its original owners.

Third, the government adheres to popular calls for the deal to be scrapped, and does so without paying the $1.5bn cancellation fee the government says it will face.

Fourth, the suit calls for holding those behind the agreement accountable.

Bustani called the agreement “absurd” and “politically, strategically and morally disastrous”.

“It supports the Zionists and their terror from our side and it dilutes our country’s sovereignty and independence at the same time,” he said.

Leaked details

As revealed by the Israeli press in 2016, the agreement stipulates that Jordan will purchase gas that comes from Leviathan, Israel’s largest offshore gas field.

The overall cost for Jordan stands at $10bn, with Israel receiving $8bn of that for supplying 300 million cubic metres of gas daily for a period of 15 years.

The deal would have been particularly valuable to Delek and Noble which has yet to produce any gas from Leviathan since it was discovered in 2010.

Companies typically require agreements to be made in advance of producing gas from fields because they are so expensive to develop, so the Jordan deal would have made further deals on the field more likely.

Since Israel discovered gas off its coast a little over a decade ago, Tamar is the only field to have produced gas for commercial consumption. It currently supplies nearly all of Israel’s gas. Its only non-domestic customers are Jordan’s state-owned Arab Potash Company and its affiliate Jordan Bromine.

Jordanian protesters hold slogans reading, " no to normalisation with the zionist enemy", "gas, enemy, occupation" during a protest in Amman in 2016 (AFP)
Jordanian protesters hold slogans reading, "no to normalisation with the Zionist enemy", "gas, enemy, occupation" during a protest in Amman in 2016 (AFP)

Previously, it had been reported that the most recent deal was inked by Jordan's NEPCO, with US firm Noble Energy acting as its guarantor.

However, the leaked agreement document, which has been seen by Middle East Eye, revealed that the Jordanian and US governments are also acting as guarantors.

This has led to fears that not only is Amman committed to paying the deal’s costs, but also if it is unable to then Washington will suspend its aid payments to Jordan in the event of any default.

'It supports the Zionists and their terror from our side and it dilutes our country’s sovereignty and independence at the same time'

- Hisham Boustani, campaign coordinator

The document also shows that were Jordan to discover its own reserves of gas, Amman would still be unable to lower the percentage it acquires by more than 20 percent.

One detail that the MP said the public had been misled on was that the deal was not only signed with Nobel Energy and Delek, rather with NBL, a consortium of four companies that the two are members of. Armouti questioned who was behind the other two members of NBL.

In terms of payment, Jordan must pay $1.5bn in the first five years, with another $800m due after 10.

If Jordan wishes to cancel the deal after 10 years, it must pay a $400m penalty.

The Jordanian government has not commented following Armouti’s latest revelations. It did not respond for MEE’s requests for comment.

Armouti has threatened to table a no confidence motion against the government unless it tears up the deal.

'Politically terrorised'

Jordan, which is struggling under a moribund economy, turned to Israeli gas in an attempt to wean itself off dependence on supply from Egypt.

In 2011, repeated attacks on the pipeline between Egypt and Jordan disrupted the country’s supply.

In the face of faltering gas supplies, Jordan was forced to turn to expensive fuel oil for its power needs, resulting in a 30 percent hike in its budget deficit.

Overall the pipeline attacks cost Jordan $5bn, with $3bn of that being charged to consumers with an extra expense on the public’s energy bills.

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Speaking to Middle East Eye, Armouti said the Jordanian government has been “politically terrorised” by the 2016 agreement, and was pressured into signing it by the US Embassy in Amman.

There are ways out without having to pay the penalty, however, Armouti said.

“Among the legal loopholes is the fact that the agreement was never presented to parliament for approval. This is a violation of paragraph 2 of article 33 of the Jordanian constitution, which states that all international agreements and treaties which have a financial burden on the treasury and affect the rights of Jordanians are considered invalid if not approved,” Armouti said.

“The agreement can also be cancelled because the gas pipeline has not been finalised due to the rejection of the professional unions and landowners where the pipeline is supposed to pass through. Various legal cases are pending on this level.”

According to the MP, the conditions of the deal state that if NEPCO can prove it has financial problems, it can be liquidated in accordance to Jordanian company law, thereby nixing the agreement.

Following a stormy session in parliament in March, the government agreed to refer the gas deal to the constitutional court to decide its legality. However the government is yet to do so.

This is not the first gas deal Jordan has inked with Israel.

'Among the legal loopholes is the fact that the agreement was never presented to parliament for approval'

- MP Saleh Armouti

In 2014, Jordan’s Arab Potash company signed an agreement, also with Noble Energy and Delek Group, to import $500m worth of Israeli gas over 15 years.

The gas, which came from Israel’s offshore Tamar field, began flowing into Jordan in March 2017.

A second deal to purchase gas from Tamar was signed last year for $200m.

Despite the gas agreements’ existence becoming public knowledge, the actual cost that Jordan is paying for a single unit of gas purchased from Israel continues to be a state secret.

Some believe that Jordan is actually paying over world market price for gas coming from Israel.