An agreement is expected to be reached soon between the two countries to start the process of floating tenders to implement the scheme, Jordanian and Iraqi officials said Wednesday during the Basra Investment Conference, according to Jordantimes.

“Today, we are here to announce this mega-project between Iraq and Jordan, which enjoy historic distinguished ties,” Iraqi Business Council (IBC) President Majid Saadi said during the forum, according to the news website. 

He added that the project will help enhance cooperation between the two countries and help boost the Jordanian economy, noting that Iraqi investments in Jordan in different sectors exceed $11 billion.

If realized, the pipeline could provide a substitute to seaborne transport of oil through the Strait of Hormuz after Iran threatened last year to block it if the West imposed more sanctions overs its nuclear program.  The pipeline  would also deliver a significant export outlet for Iraq’s growing crude-oil production.

The pipeline is slated to run from Iraq’s southern of Basra to Anbar province and then to Jordan’s port city of Aqaba. according to Hurriyet daily. 

Jordan is heavily dependent on imported oil and gas, as 96 percent of its oil and gas come from other markets. The Arab uprisings  in two of Jordan’s strategic economic partners, Egypt and Syria, had a dire economic impact. Losses from disruption of Egyptian gas to the country, alone stand at a massive $1.8 billion.

The 2005 Egypt-Israel gas deal has been viewed by many Egyptians with great suspicion while critics point out Israel got gas at below market prices making the deal a rip-off for Egypt.

Israel claims it is paying a fair price for the gas.

The 1979 peace treaty, the largest trade deal between the two countries, which required Egypt to supply Israel with oil, was later amended to natural gas.

Egypt’s pipeline in the Sinai supplying natural gas to Israel has been attacked 14 times since uprisings began in February 2011 causing disruption in gas supplies.

The attacks believed to oppose the sale of gas to the Israel became  more frequent and supplies were halted after the overthrow of Mubarak in February, reuters reports.

Egypt supplied Israel with more than 40 percent of its natural gas needs to produce electricity. Meanwhile, electricity prices have risen by more than 20 percent in Israel since the attacks began, according to JTA.

Israeli officials believe that immediate exploitation of two major natural gas fields off the country’s northern coast could compensate for the loss of Egyptian gas.

Israel has already moved to begin exploiting the fields, signing a deal with Cyprus.

Furthermore, Mohamed Shoeb, the head of the Egyptian Natural Gas Holding Company, said the decision to cancel the deal was not political.

“This has nothing to do with anything outside of the commercial relations,” Shoeb told The Associated Press.

He said Israel has not paid for its gas in four months. Israeli Foreign Ministry spokesman Yigal Palmor denied that.

Shoeb told Egyptian TV that the decision to terminate the deal was made
 Thursday because “each side has rights and we are representing our rights.”

An agreement was reached in 2005 between the Israeli and Egyptian governments as part of a political agreement according to which Cairo undertook to allocate 7 billion cubic meters (BCM) of Egyptian gas to the Israeli market for 20 years, with an option to double the supply, according to Haaretz.