Lebanon signs deal to import gas from Egypt through Syria to boost energy supply

Nation has become hugely dependent on private generators due to faltering electricity sector

Aurore Feghali, of the Lebanese Energy Ministry, Magdy Galal, chairman of the Egyptian Natural Gas Holding Company and Nabih Khrestin, of the Syrian General Petroleum Corporation, sign the deal in Beirut. Reuters
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Lebanon has signed a deal to import 650 million cubic metres of gas from Egypt through Syria, it was announced on Tuesday, adding another four hours a day to the ailing Lebanese power grid.

The agreement between the three countries was announced at a ceremony in Beirut with Walid Fayyad, Lebanon’s Energy Minister, alongside Syrian and Egyptian officials.

Mr Fayyad said the gas would be shipped to Lebanon’s Deir Ammar plant, adding about 450 megawatts to Lebanon’s power grid.

“The agreement signed today crowns hard work that began nine months ago,” he said.

The deal, in progress since last summer, is expected to last for an initial 10 years but it still needs US approval to ensure it does not breach sanctions on Syria. The agreement also requires the backing of the World Bank, which has said it would provide financing.

Mr Fayyad told a press conference the additional hours of electricity were desperately needed for Lebanon.

The minister said the support of the US and the international community was "essential" to ensure the project gets off the ground.

"We hope that after today, all hurdles will have been cleared so that we can receive World Bank funding and ... final guarantees from the US, especially with regard to sanctions," he said.

Also present was Magdy Galal, chairman of the state-owned Egyptian Natural Gas Holding.

Financial terms were not revealed but Mr Galal said Egypt would "offer an appropriate and preferential price".

Asked by Reuters when the gas could start flowing, Mr Fayyad said: "Ask the World Bank. As soon as they approve the financing, we're good to go."

The deal is a part of wider efforts — which include a separate electricity deal with Jordan — to increase supply by eight to 10 hours a day in the coming months.

Tuesday's announcement comes after the visit of US energy envoy Amos Hochstein to Beirut last week.

He said at the time: "We've given pre-approval for the project and as soon as Egypt and Lebanon can agree on the terms, which hasn't happened yet, then we can evaluate the project" for compliance with the sanctions regime.

Assuming the deal is in compliance, "then I believe we will be in a place where we can say it doesn't violate the Caesar sanctions and have the gas finally flow," he said, referring to US sanctions imposed on the Syrian government.

Lebanon’s residents have become increasingly dependent on private generators as the country’s electricity sector floundered as a result of a prolonged economic collapse.

The state electricity company is currently providing only a few hours of power each day to households — less than 10 per cent of the country’s power needs.

Mr Fayyad previously told The National that he expected Egypt to send the gas to Syria, which would then distribute internally and export from its own fields to Lebanon.

Updated: June 21, 2022, 3:12 PM
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