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World Bank funding essential to pumping Egyptian gas to Lebanon

(L to R) Egypt's Minister of Petroleum and Mineral Resources Tarek el-Molla, Jordan's Minister of Energy and Mineral Resources Hala Zawati, Lebanon's Energy Minister Raymond Ghajar, and Syria's Minister of Oil and Mineral Resources Bassam Tohme give a joint press conference during their meeting in Jordan's capital Amman on September 8, 2021. (Photo by Khalil MAZRAAWI / AFP)

BEIRUT: The resumption of the Egyptian gas to Lebanon depends on the speed of talks between the Lebanese government and the World Bank to secure funding for this project, a source at the Energy Ministry said Thursday.

“I am not worried a lot about the technical and logistical side because technical teams from Lebanon, Syria, Jordan and Egypt will examine the Arab pipeline to ensure whether these pipes are operational or need some repairs. But we can’t say when the Egyptian gas will start pumping through these pipelines until the talks with the World Bank starts. There is no time frame for Lebanon to receive the gas,” the source told The Daily Star on condition of anonymity.

Energy ministers from Egypt, Jordan, Syria and Lebanon agreed on a plan Wednesday during a meeting in Amman to bring gas and electricity to Lebanon .

Lebanon’s Energy and Water Minister Raymond Ghajar headed the Lebanese delegation to Amman.

The source described the talks in Amman as very successful and productive.

But the main issue which still delays the resumption of Egyptian gas to Lebanon is money and how fast Beirut can secure funds from the World Bank.

“Egypt is also set to siphon the gas to Deir Ammar power plants once Lebanon strikes a deal with the World Bank. The talks may produce results in three months or six months. But I believe that the World Bank will be willing to extend a soft loan to Lebanon if all the preparations are made and the Arab gas pipeline is rehabilitated quickly,” the source explained.

But the source said it’s too early to estimate the cost of the Egyptian gas to Lebanon.

Ghajar said the country needed "600 million cubic meters (21 billion cubic feet) of gas to provide 450 megawatts of electricity".

The talks in Amman focused on five points:

1) Reactivating the agreement signed between the Arab Gas Pipeline countries related to the supply of natural gas to the Lebanese Republic.

2) Ensuring the readiness of the infrastructure necessary to transport natural gas in each of the four countries and the necessary technical requirements.

3) Provide a clear work plan and timetable for the delivery of gas to the Lebanese Republic.

4) The logistical, technical, administrative, technical and financial requirements for the success of the project for each of the four countries.

5) Forming a technical team from the four countries concerned with the above four points.

But even if Lebanon managed to convince the World Bank to extend a soft loan for the Egyptian gas, the country will still be deep on an electricity crisis.

According to experts, Deir Ammar has the capacity to generate 450 MW of electricity, or a maximum of four hours of power every day.

The Deir Ammar plant will boost the output from the current 650 MW to 1,100 MW while the actual need of the country is 2,800 MW at least.

Laury Haytayan, a Lebanese oil and gas expert in the Middle East and North Africa, told The Daily Star that if everything worked according to plan, Egypt can immediately starting pumping gas to Lebanon.

“We first need to check if all the pipeline have not been damaged. Part of our pipeline was blown a few days and ago and if definitely needs repairs,” she said.

Haytayan added that the Egyptian gas is still not sufficient for Lebanon’s full needs.

“But if we managed to secure the gas plus the electricity to the Bekaa region and the swapped Iraqi fuel in a short period then Lebanon can boost output to nearly 2,000 MW,” she noted.

Haytayan said it is all a question of timing, ruling out quick solutions for Lebanon’s chronic electricity problems in the foreseeable future.

 

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