Can Arab Gas Pipeline plan enable Lebanon to keep the lights on?

Protesters gather in front of the Lebanese electricity company headquarters in Beirut, where a crippling cocktail of crises is threatening to plunge the cash-strapped country into total darkness. (AP)
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Updated 12 October 2021
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Can Arab Gas Pipeline plan enable Lebanon to keep the lights on?

  • On Sunday the Lebanese state electricity network collapsed completely for the second time this month
  • Arab Gas Pipeline deal struck with Egypt, Jordan and Syria offers glimmer of hope amid the darkness

DUBAI: Lebanon was plunged into a total blackout this week after two of its main power plants shut down before the army stepped in to supply fuel from its stocks. It was the latest in a series of disasters to strike the country’s public-services infrastructure in general, and the power sector in particular, in recent times.

Energy production reportedly dropped to less than 200 MW while the country requires around 3,000 MW. The blackout occurred less than a month after Electricite Du Liban, the state electricity corporation, warned that Lebanon was heading toward a “total and complete” power outage unless more fuel supplies were secured.

The collapse of electricity production also came just weeks after the energy ministers of Egypt, Jordan, Lebanon, and Syria agreed on a road map for the delivery of Egyptian natural gas to Lebanon, which, if successfully implemented, could provide the country with up to 17 hours of electricity per day.

Millions of Lebanese currently endure power outages of up to 22 hours per day as their leaders struggle to secure the foreign capital needed to import fuel. Operators of private backup generators are being pushed to their limits as costs of diesel and repairs have skyrocketed.

“We hope that the import of gas will happen as soon as possible and the cooperation between the countries is considered natural because it is not the first time that cooperation between us has taken place,” Raymond Ghajar, Lebanon’s former energy minister, said last month.

Earlier this month, after a meeting with his Egyptian counterpart Tarek El-Molla in Cairo, Ghajar said Egypt had offered extra quantities of gas. Molla hinted that a deal could be finalized “within the coming weeks.”

The plan is part of a US-coordinated effort to deliver natural gas via the Arab Gas Pipeline, which originates near Arish on Egypt’s Sinai Peninsula and extends through Jordan, Syria and into Lebanon.




Lebanon’s former Energy Minister Raymond Ghajar, Jordan’s Energy Minister Hala Zawati, Syria’s Minister of Oil and Mineral Resources Bassam Tohme and Egypt’s Minister of Oil and Mineral Resources Tarek El Mol. (Reuters)

“This is a good step in the right direction but more needs to be done,” Laury Hayatyan, MENA director at the New York-based Natural Resource Governance Institute, told Arab News, citing the need for forming technical committees from each country to monitor the pipeline’s condition.

According to Ghajar, Lebanon is in talks with the World Bank to secure financing for the import of Egyptian natural gas, which will provide the country with 450 megawatts of power.

“To produce 450 MW, Egypt has to provide Lebanon with around 1 billion cubic meters or 670,000 tons of gas,” Marc Ayoub, an energy policy researcher at the American University of Beirut’s Issam Fares Institute, told Arab News. “Egypt can probably do that given its large gas discoveries in recent years.”

The total energy production and the amount of gas needed will also depend on the efficiency of Lebanon’s power plants, he said.

Lebanon currently has a maximum power generating capacity of 2,000 MW, far less than the 2017 summer peak demand of 3,400 MW. The power generating-capacity figure is misleading, however; some 50 percent of the output is wasted due to grid inefficiencies.

The biggest challenge facing the Arab Gas Pipeline is something else, however: The state of the industrial infrastructure of each country.

Infrastructure in Syria, a country devastated by a decade-long civil war, is in urgent need of repair so that gas can reach Lebanon. Egyptian gas stopped flowing through Syria in 2010.

“They said that gas will be transported as soon as possible,” Hayatyan said. “But what exactly does this mean and how much time will it actually take to set up everything?”

Despite the US sanctions on Syria under the Caesar Syria Civilian Protection Act of 2019, which prohibits financial transactions with the country’s institutions, Washington seems to have given its tacit approval to the pipeline proposal.
 




Lebanon’s capital, Beirut, was pushed into a total blackout in April after its main power stations went offline due to a lack of fuel. (AFP)

“There were signals from the US ambassador to Lebanon that initiated these proceedings, but we must wait for an official confirmation from the US Treasury,” Hayatyan said.

However, the exact payment terms must be agreed on, given that each point of entry charges a transit fee for gas to pass through. “For instance, before the civil war in Syria, they used to take part of the gas transported instead of cash payments,” she said.

In the past, the gas was transported to Lebanon’s Deir Ammar power plant. However, if the arrangement is to be revived, the plant will need to be refitted, having been run on liquid fuel for many years.

If the deal eventually goes ahead, it will not be the first time Lebanon has imported gas from abroad. “We used to import gas back in 2004 when the Arab Gas Pipeline was completed,” Roudi Baroudi, an oil and gas expert, told Arab News.

“If Lebanon had fully benefited from that partnership and the Arab pipeline, most of its electricity problems would have been resolved.”

Lebanon’s government says net transfers to state power firm EDL amount to between $1 billion and $1.5 billion per year, most of which is spent on fuel oil. In 2016, the International Monetary Fund said the accumulated cost of subsidizing EDL amounted to roughly 40 percent of Lebanon’s entire national debt, which itself exceeded 150 percent of its GDP.

Had Lebanon made the most of its pipeline partnership, the state’s treasury could have saved something in the region of $5 billion over 18 years. “That is if we assume that the price of a barrel of oil ranges between $50 and $60,” Baroudi said.

Egypt, Jordan, and Syria might be willing to extend credit lines to Lebanon, at least in the short term, Baroudi said, adding that “the most important thing now is to open diplomatic channels with all these countries.”

To increase the productivity of the new pipeline supply, Baroudi said it would make sense for Lebanon to convert the rest of its power plants to run on gas. “The Zahrani, Jiyeh, and Zouk plants should be converted and connected to the grid,” he said.
 





“We are now counting on the international community to fund vital projects in the public and private sectors to revive economic life,” Lebanese President Michel Aoun said. 

In the meantime, Lebanon is looking to purchase excess capacity from Jordan, which could supply about three hours of electricity per day. “Jordan has been producing an excess of electricity in recent years after embracing renewables and is looking to sell that to neighboring countries,” Hayatyan said.

Lebanon also struck a deal with Iraq in February to swap one million tons of Iraqi oil for derivatives that match its own power plants’ specifications.

When precisely the Lebanese people will see any benefits is unclear. Grappling with the worst financial crisis in its history, Lebanon has gradually increased fuel prices in recent months because the cash-strapped central bank can no longer afford to fund fuel imports.

The latest price hike, expected to be followed by further increases in the coming weeks, is widely seen as a prelude to a final and definite lifting of fuel subsidies by the government.

Acute fuel shortages have brought the small Mediterranean country to the brink of humanitarian disaster, with hospitals across the country struggling to provide power to ventilators and other life-sustaining equipment.

To fill a medium-sized vehicle’s tank, most Lebanese have to pay close to the monthly minimum wage of 675,000 Lebanese pounds, at a time when nearly 80 percent of the population is estimated to live below the poverty line.


Lebanon media says UN peacekeepers hurt in Israeli strike

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Lebanon media says UN peacekeepers hurt in Israeli strike

  • National News Agency: ‘Enemy aircraft targeted a car in Sidon near the army checkpoint’
  • Vehicles from the UNIFIL peacekeeping force were in the ‘same lane’ during the raid
SIDON, Lebanon: UN peacekeepers in Lebanon were wounded on Thursday in an Israeli strike near their vehicle at the entrance to the southern city of Sidon, the official National News Agency said.
“Enemy aircraft targeted a car in Sidon near the army checkpoint,” NNA said, adding vehicles from the UNIFIL peacekeeping force were in the “same lane” during the raid, which led to injuries among its members who were receiving treatment at the scene.

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Hezbollah does not pin ceasefire hopes on any US administration, lawmaker says

BEIRUT: Hezbollah welcomes any effort to stop the war in Lebanon but does not pin its hopes for a ceasefire on any particular US administration, Hezbollah lawmaker Ibrahim Al-Moussawi said on Thursday, when asked about Donald Trump’s election victory.


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France sees ‘window’ to end Gaza, Lebanon wars after Trump win

JERUSALEM: French Foreign Minister Jean-Noel Barrot said Thursday in Jerusalem he saw prospects for ending Israel’s wars in Gaza and Lebanon after Donald Trump was elected US president.
“I believe a window has opened for putting an end to the tragedy in which Israelis, Palestinians and the entire region have been immersed since October 7” last year, Barrot told reporters in Jerusalem.
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Barrot said he hoped a “diplomatic solution” would emerge “in the coming weeks.”
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Israel signs $5.2 billion deal to acquire 25 F-15 fighter jets from Boeing

Updated 57 min 56 sec ago
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Israel signs $5.2 billion deal to acquire 25 F-15 fighter jets from Boeing

  • The $5.2 billion agreement was part of a broader package of US aid
  • Delivery of the new F-15IA aircraft will begin in 2031

JERUSALEM: The Israeli defense ministry said on Thursday it had signed an agreement to acquire 25 next generation F-15 fighter jets from Boeing Co.
It said the $5.2 billion agreement was part of a broader package of US aid approved by the US administration and Congress earlier this year and included an option for 25 additional aircraft.
Delivery of the new F-15IA aircraft will begin in 2031, with 4-6 aircraft to be supplied annually, it said.
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“This F-15 squadron, alongside the third F-35 squadron procured earlier this year, represents a historic enhancement of our air power and strategic reach — capabilities that proved crucial during the current war,” the director general of the defense ministry, Eyal Zamir, said in the statement.
Zamir said that the government has secured procurement agreements worth nearly $40 billion since the onset of the war in Gaza that began Oct. 7, 2023.
“While focusing on immediate needs for advanced weaponry and ammunition at unprecedented levels, we’re simultaneously investing in long-term strategic capabilities,” he said.
For Boeing, the F-15 agreement is the second major deal this year. In August, flag carrier El Al Israel Airlines, signed a deal with Boeing for the purchase of up to 31 737 MAX aircraft worth as much as $2.5 billion, beating out rival Airbus.
Ido Nehushtan, president of Boeing Israel, said the company’s relationship dates back to Israel’s establishment and “will continue working with the US and Israeli governments to deliver the advanced F-15IA aircraft through standard military procurement channels.”


Erdogan phones Trump to discuss cooperation

Updated 07 November 2024
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Erdogan phones Trump to discuss cooperation

ISTANBUL: Turkish President Recep Tayyip Erdogan has spoken by phone with US president-elect Donald Trump to discuss cooperation between the two countries, the presidency said on Thursday.
Erdogan “congratulated Trump on his election victory” and “expressed his desire to develop cooperation between Turkiye and the United States in the period ahead,” it said in a statement.
Erdogan was twice hosted at the White House by Trump during his first term, but has never been received there by current President Joe Biden.