Egypt signs deal to supply Lebanon with natural gas

Jun 02, 2009 02:00 AM

Egypt will supply Lebanon with 600 mm cm of gas each year under to help the country meet growing energy demand, Energy and Water Minister Alain Tabourian announced.
Tabourian said he signed the deal with his Egyptian counterpart Sameh Fahmy on the sidelines of a meeting held between Arab Energy Ministers in Cairo.

The minister said the flow of gas to Lebanon's Beddawi power station near Tripoli will start in August. The Egyptian gas will operate one of the two turbines in Beddawi, or half the real capacity of the station which was built in 1996.
Officials hope to receive an additional 600 mm cm of gas from Egypt in October to operate all the turbines.

The deal with Egypt is expected to have a positive impact on the Lebanese Treasury, which has been strained by huge fuel and kerosene bills. Nearly all of Lebanon's aging power stations run on fuel oil and gas oil.
The Finance Ministry said in its last report that the Treasury spends more than $ 1.2 bn a year to subsidize the cost ofbuying fuel oil. Tabourian said Lebanon can save up to $ 200 mm a year if the entire Beddawi plant is run on gas. The use of gas in the station would also extend its serviceability, he said. Beddawi has been operating on fuel oil since 1996.

The minister said that the price of natural gas would remain stable in Lebanon even if the price of oil rose globally. Gas imports from Egypt will also reflect positively on the Lebanese market, and most notably the industrial sector and on households.
"This step will reduce production costs in the Lebanese industrial sector which will lead to its improvement and increase its chances to compete on a worldwide basis," Tabourian said. He added that the deal would also create more job opportunities and prevent people from emigrating. The use of natural gas by households will cut heating costs by 50 %, he said.

Earlier, the minister said that Egypt is set to supply Lebanon with electricity as part of the regional power grid.
"The regional power grid which connects eight countries in the Middle East is expected to supply Lebanon soon with badly needed electricity to supplement the insufficient power in the country," Tabourian said earlier.

His remarks were made during an official launching of an investment in a relay station in Ksara, Zahle, with the capacity to handle up to 400 MW supplied by Egypt and passing through Jordan and Syria.
The ceremony was attended by Egypt's Energy Minister Hassan Ahmad Younius, Syrian Energy Minister Ahmad Kasi Kayali and Jordan's Energy Minister Khaldoun Katchan.

Source / The Daily Star
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