Lebanon funding for Egypt gas deal to come in weeks: US

Negotiations between Lebanon and the World Bank to secure financing for a deal to import Egyptian gas could be concluded "in a matter of weeks," according to the US State Department's special energy envoy Amos Hochstein.

"I think we are making good progress on getting towards a World Bank arrangement and a facility to finance this purchase of gas," Hochstein said in a televised interview with Lebanese broadcaster LBCI late yesterday. "And I hope that in a matter of weeks, we can have that done."

Lebanon has been in discussions with Egypt for several months about taking its gas to help relieve a crippling energy crisis that has resulted in rolling blackouts across the country. The talks have centered on a plan to import through the 10bn m³/yr Arab Gas Pipeline (AGP), which can transport gas from Egypt to Jordan, Syria and Lebanon.

Renovation work on the Lebanese segment of the pipeline began a few weeks ago and will take "several more weeks" to conclude, Hochstein said. Lebanon's energy minister Walid Fayad said in December that work is expected to be completed by early March.

But a lot still needs to be done in parallel, Hochstein said, the most important of which are the financing deal, the signing of contracts and getting necessary approvals from the US. This is required because Syria would keep a small percentage of the gas to use for domestic power generation in exchange for allowing the gas to flow through its territory. Hochstein said the deal would need not to violate any US sanctions on Damascus, specifically the Caesar Act that was implemented in June 2020.

"I think we can get it all done around the same time, and that gives us the time to complete the work and get the gas flowing," he said.

Jordanian Power

Lebanon has separately signed an electricity supply and transit deal with Jordan and Syria. This agreement, signed on 26 January, will see Jordan supply Lebanon with 150MW of electricity from midnight to 06:00, and 250MW from 06:00 to midnight starting in March. That roughly equates to around two hours of electricity per day.

Hochstein said progress is being made on that deal, but stressed Washington is studying the agreement on "the electricity synchronization and interconnection".

Lebanon's energy ministry ultimately plans to secure eight to 10 hours of power per day through these deals to supply the main power provider Electricite du Liban. The Lebanese government has been trying to ease the energy crisis since July, signing a deal with Iraq to buy 1mn t/yr of heavy fuel oil and resell it for the products it needs and a separate agreement with Baghdad for 500,000t (3.73mn bl) of gasoil. Lebanon has also received several Hezbollah-brokered gasoil shipments from Iran via Syria since September.

Hochstein arrived in Lebanon on 8 February, and has met with officials to mainly discuss the issue of the southern maritime border demarcation.

By Sarah Raffoul