Lebanon, Syria, Egypt sign “conditional” agreement to supply natural gas

The World Bank wants reforms before financing the agreement
Lebanon, Syria, Egypt sign “conditional” agreement to supply natural gas
The Lebanese Minister of Energy Walid Fayyad in a press conference today

Lebanon, Syria and Egypt signed today, Tuesday, an agreement to transport 650 million cubic meters of gas annually from Egypt to Lebanon via Syria, in a ceremony held at the Lebanese Ministry of Energy in Beirut.

Under the agreement, the gas will be pumped through a pipeline to the Deir Ammar power station in northern Lebanon, where it can add about 450 megawatts to the grid, equivalent to about four additional hours of electricity per day.

However, this agreement does not mean that Lebanon will immediately obtain gas to increase its production capacity. This is related to Egypt’s condition that it obtain written guarantees from the United States that it would not be affected by Caesar’s sanctions imposed on Syria. The fact that gas is brought to Lebanon means that it must pass through Syrian territory. Note that the United States imposes sanctions on Syria that fall within the framework of what is known as Caesar’s Law, which affects anyone who cooperates with the Syrian regime.

Moreover, the implementation of the agreement is subject to the approval of the World Bank to finance the importation of gas, which stipulated that Lebanon implement fundamental reforms in the dilapidated electricity sector, which cost the Lebanese treasury more than 45 billion dollars.

It is noteworthy that the agreement is part of external efforts to address the power outage in Lebanon by transferring electricity from Jordan and natural gas from Egypt through Syria.

The plans, which together would add up to 700 megawatts to Lebanon’s electricity grid, were first suggested in the summer of 2021 but have faced several delays.

In October 2021, Jordan hosted a ministerial meeting of the Arab Gas Pipeline countries (Egypt, Jordan, Syria and Lebanon), during which it was agreed to deliver Egyptian natural gas to Lebanon, and a work plan and timetable for implementing this were presented.

In late January, Lebanon signed an agreement with Jordan to deliver electricity through Syria. The total cost of importing gas from Egypt and importing electricity from Jordan is estimated at $250 million annually.

In March, the Lebanese Cabinet approved a plan to reform the electricity sector, but it has not yet implemented the main components of the plan.

During the signing, the Lebanese Minister of Energy, Walid Fayyad, affirmed that “this agreement would not have happened without Egypt’s adoption of the project from the first moment, following it up in its details and supporting all its stages, leading to securing an increase in the quantity.”

He explained, “This agreement will provide an additional 4 hours of electricity in Lebanon, which it desperately needs.”

It is expected that electricity production through this agreement will be in the range of 7 cents per kilowatt-hour.

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