Egypt rejects LNG, plans to send gas to Lebanon via Arab pipeline

Egypt has announced that it will immediately halt gas supply to the Egyptian Liquefied Natural Gas (ELNG) export terminal at Idku, near Alexandria, and will not supply gas to the LNG plant. Damietta until the end of the year, as it prepares to redirect surplus gas exports to Lebanon via the Arab Gas Pipeline.

The Jordanian Ministry of Energy and Mineral Resources announced in early September that it would deliver Egyptian gas to Lebanon after the oil ministers of the countries responsible for the Arab gas pipeline (Egypt, Jordan, Syria and Lebanon) met in Amman. to agree on a regional response to the Lebanese crisis. current fuel and electricity crisis, local media reported.

The English-language news site quoted Egyptian Minister Tarek El Molla as saying: “Egypt is working to speed up coordination for the delivery of Egyptian natural gas to Lebanon via Jordan and Syria.”

Lebanon is in a state of economic collapse that the World Bank has called one of the worst on record, and due to lack of foreign currency to pay for its energy imports, the country has been forced to shut down its two main power stations in July for lack of fuel, plunging the country into an almost total blackout.

US sanctions prohibiting transactions with the Syrian government had blocked earlier attempts to deliver Egyptian gas to Lebanon because the gas must pass through Syrian infrastructure; Likewise, Jordan’s electricity is transported to Lebanon via Syria.

However, Washington now seems willing to grant exemptions to facilitate the transit not only of Egyptian gas but also of electricity from Jordan; the United States is also said to be in talks to obtain financing from the World Bank to allow Lebanon to pay for these imports, international media France 24 reported.

The apparent relaxation of the US position allowed the first high-level visit by a Lebanese government official to Damascus since the start of the Syrian civil war 10 years ago when, on September 4, the Deputy Prime Minister by Interim Lebanese Zeina Akar met the Syrian Foreign Minister. Faisal Mekdad in Damascus to discuss the current energy crisis in Lebanon.

The 10 billion m3 Arab gas pipeline capacity (Fig. 1) goes from the city of el-Arish in Egypt to Aqaba in Jordan. It continues north to Rehab where it supplies Jordanian power plants with gas before continuing to Syria where it crosses the border and reaches the city of Homs.

Fig. 1-The Arab gas pipeline from Egypt to Lebanon.

Credit: US Energy Information Administration.

Until the start of the civil war in Syria in 2011, Egypt had supplied natural gas to Lebanon through the Arab gas pipeline system.

On September 16, Egyptian Ambassador to Lebanon Yasser Elwi met with Walid Fayyad, Minister of Energy and Water for Beirut to further discuss resuming Egyptian gas flows.

The next day, the Middle East Economic Survey (MEES) reported that the Egyptian state-owned company Egyptian Natural Gas Holding (Egas) told its partners that operate the export terminal of ELNG – Shell and Malaysia’s Petronas – qu ‘she was shutting off the gas supply “with immediate effect.”

Egas also informed the Italians Eni and Petronas, the operators of Damietta, that it would only provide this installation until the end of 2021, the MEES reported.

Anglo-Dutch Shell and Petronas operate ELNG’s export terminal in Idku. The two trains at the terminal have a production capacity of 7.2 mtpa of LNG, according to the Shell website. Project partners also include French Engie (Gas de Suez); Egas; and another Egyptian public company, Egyptian General Petroleum Corporation (EGPC).

Meanwhile, the 7.56 billion m3 capacity The Damietta Segas LNG terminal west of Port Said only resumed operations in February after being inactive in November 2012 due to an ownership dispute.

Eni holds a 50% stake in Damiette following a settlement of the dispute, which closed in March 2021, while EGAS owns 40% and EGPC 10%, according to Eni’s website.

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