Will Egyptian gas reach Lebanon?

A view of Beirut, Lebanon, by air (Photo by Shutterstock)

Ahmad Abdul-Rahman talks about about the transportation of Egyptian gas to Lebanon and what it means for the region.

Lebanon is preparing to implement its agreement with Iraq to obtain fuel oil to secure electricity generation and save the Lebanese from the problem of power outage that they suffer daily. Meanwhile, the Executive Director of the International Monetary Fund (IMF), Mahmoud Mohieldin, during his recent visit to Beirut, informed caretaker Prime Minister Hassan Diab that Jordan managed to obtain US approval to exclude Egyptian gas from the Caesar-Syria-Civilian-Protection-Act of 2019, also known as the Caesar Act. Under this Act, US legislation sanctions the Syrian government, including Syrian President Bashar al-Assad, for war crimes against the Syrian population.

The Caesar Act not only imposes sanctions on the Syrian government, but also directly and tightly punishes all countries and entities that deal
with it.This exception for Egyptian gas will allow its passage through Jordan and Syria to Lebanon, without being subjected to sanctions.

Lebanon desperately needs gas, something which is stressed by Lebanese officials. At the moment its purchase is a drain on the country's much-needed dollars, especially since studies have shown that removing its purchase would save more than US $1 billion
annually. This, in turn, will reduce the chronic financial deficit of the Electricite du Liban (EDL), with a debt estimated at about $47 billion. This deficit contributed to the increase in the size of the public debt to more than $100 billion.

It is also the subject of fierce criticism from the IMF which has demanded that the EDL be reformed, as a prerequisite for agreeing to provide international aid to Lebanon.

The country had previously signed a 15-year contract with Egypt to obtain gas via the Arab Gas Pipeline, which was implemented about  30 years ago, after it was connected to a line linking Homs in Syria to Tripoli in northern Lebanon. However, Egypt froze the agreement. The reason that was given at the time was that Egyptian gas was no longer sufficient to satisfy the demand of the local market. 

Lebanon and Syria had planned not to have an electricity crisis. It was for that reason that the Arab Gas Pipeline in 2003 was established. The first phase was inaugurated between the Egyptian Al-Arish and Jordan's Aqaba. The line was completed inside Syrian territory, all the way to Tripoli, Lebanon, in 2008.

Lebanon's energy crisis leads to power outages for long hours, one of the repercussions of one of the worst economic crises the country has seen. It also coincides with a political crisis that has been going on for nearly a year, a result of the difficulties of forming a government. 

In any case, to transfer Egyptian gas to Lebanon requires the gas pipeline to be repaired, a step that will be very costly and will take a
long time. To get electricity from Jordan also requires repairing the electrical network in Syria. Negotiations began with Damascus, the Syrian capital, about the possibility of allowing this last August. To do this, there are three conditions that must be met, according to the IMF. The first was the repair of gas pipelines. The second was the reform of the electricity network. The third and final condition was to hold Lebanese-Syrian talks by sending an official Lebanese delegation to sign an agreement.

The events of the so-called Arab Spring, which swept the region in late 2010, halted the project, however. The line was exposed to a series of bombings in Al-Arish.  Now the economic conditions seem better and there is a readiness to reinvest in the line in the near future. Egypt is now a gas producing and exporting country, and Jordan, Syria and Lebanon are in great need of gas. 

However, achieving this objective depends on developments related to the nature of relations and political interests among the countries of the region. From time to time, all parties are exposed to geopolitical tensions that impede the restoration of stability. This situation applies especially to relations between Lebanon and Syria. 

Assuming that US approval is guaranteed as regards to the Caesar Act, that Jordanian mediation is successful, and that the Egyptian government is ready to pump gas, the question remains: Can the Arab Gas Pipeline pass through Syria without a prior agreement between the governments of the four countries? Can Lebanon transcend a series of pending joint issues with Syria, while it suffers from a financial drain in dollars?

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Friday, 24 September 2021