Oil & Gas Middle East – November 2018

(Jacob Rumans) #1
17

LEBANON FOCUS

oilandgasmiddleeast.com NOVEMBER 2018


Arab Gas Pipeline to the North Lebanon Beddawi
plant, but this project stopped due to gas shortages
in Egypt and escalating turmoil in the country, fol-
lowed by the war in Syria.
But Lebanon could soon have its own network of
pipelines along the country’s coast, interconnecting
major power plants. As part of this plan, a contract
is up for tender for the development and operation
of three liquid natural gas (LNG) floating storage
and re-gasification units (FSRUs) and associated
pipelines, which will be awarded early next year.
“If the tender goes smoothly and things work as
planned we might have our gas from these FSRUs in
2021 or 2022,” Chbat says. It is the fastest poten-
tial fix to the problem, and might save the country
some money on fuel purchases, but still requires
imported LNG.
When gas was first discovered in the Levant
Basin in the eastern Mediterranean in 2009, it must
have seemed like a saving grace to the Lebanese
government. But licensing was delayed because of
recurring political issues.

This situation has made EDL, which says it con-
trols 90% of the country’s electricity sector, a huge
deficit centre for the government.
The International Monetary Fund wrote in a
February 2018 report that “the electricity sector has
not only been widely identified as Lebanon’s most
pressing bottleneck, but it also remains a significant
drain on the budget,” pinpointing the electricity
sector as a key issue for economic reform.
Chbat estimates that EDL has, over the years, ac-
counted for around $30bn of Lebanon’s total debt.
The Ministry of Finance estimates that gross public
debt was at $82.9bn by the end of Q2 2018, up $1bn
from the previous quarter.
“If we look at the state, it is estimated that if we
switch the current existing capacity for electric-
ity, around 60% or 65% of it, which is realistic, to
fired gas, we are saving around $1bn dollars a year,”
Chbat says.
There have been attempts to remedy this situa-
tion with no substantial success. Gas was imported
from Egypt for a few months in 2009 through the

Lebanon has 10
offshore blocks
that have yet to
be explored
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