Lebanon and Egypt signed a landmark memorandum of understanding on December 29th aimed at addressing the country’s crippling energy crisis. The agreement seeks to supply Lebanon with much-needed natural gas, as the nation grapples with daily power outages exceeding 20 hours and a staggering $40 billion in debt accrued by its electricity sector since the end of the civil war. Officials from both countries outlined a phased approach, including pipeline rehabilitation – with assessments already underway with support from Jordan – to facilitate the import of Egyptian gas and reduce reliance on fuel oil.
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Lebanon and Egypt signed a memorandum of understanding regarding natural gas, a move intended to address the country’s chronic electricity crisis. The agreement comes as Lebanon faces power outages exceeding 20 hours daily and a significant drop in production, highlighting the urgency for sustainable energy solutions.
The memorandum was signed by Lebanon’s Minister of Energy, Walid Fayyad, and Egypt’s Minister of Petroleum and Mineral Resources, Karim Badawi, under the patronage of Lebanese Prime Minister Nawaf Salam. Egyptian Ambassador to Lebanon, Alaa Moussa, and several officials from both countries were also present.
Gradual Shift from Fuel Oil to Natural Gas
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Following the signing, Minister Fayyad announced Lebanon’s decision to gradually transition its energy sector from fuel oil to natural gas. “Natural gas is cheaper and less harmful to the environment than fuel oil, and it will remove us from all the complications of fuel oil tenders,” he stated.
Fayyad also noted that Lebanon received a report from a technical committee, initiated by Jordan, which assessed the pipeline extending from Aqaba to Syria, as well as another pipeline from the north supplying the Deir Ammar power plant with gas. The evaluation indicated that the cost of rehabilitating the Lebanese section of the pipeline is not substantial, with an estimated completion time of three to four months.
He added that similar assessments are underway on the Syrian side, and Lebanon will contact donor countries to explore funding options for rehabilitating the pipeline from Deir Ammar to the Syrian border.
The development arrives as Lebanon’s electricity sector remains one of the most troubled in the country, accumulating over $40 billion in debt since the end of the civil war. Successive governments have failed to find a lasting solution due to a combination of political crises, deteriorating infrastructure, and allegations of corruption.
Diversifying Gas Sources
Fayyad emphasized Lebanon’s commitment to diversifying its gas sources through the use of natural gas, noting ongoing efforts with Gulf states and the International Finance Corporation to establish new gas-powered plants, as well as a gasification facility.
He explained that the memorandum of understanding with Egypt aims to secure natural gas supplies from Egypt when available, adding that details regarding the contract and pricing will be finalized in the coming weeks. Lebanon’s strategy, he said, centers on transitioning to natural gas and diversifying its sources via land or sea.
Responding to questions from reporters, Fayyad suggested that cooperation with Egypt could eventually lead to a contract to purchase natural gas to supply the Deir Ammar power plant. He acknowledged this process will take time, requiring pipeline rehabilitation and coordination with Syria and Jordan.
He affirmed that this is an initial step, noting the technical report received by Lebanon highlighted the need to rehabilitate the pipeline within Lebanese territory, pending a report from Syria to determine requirements on their side.
Aoun: A Practical and Essential Step
Lebanese President Joseph Aoun expressed Lebanon’s gratitude, from both the president and the people, for the support provided by Egypt under the direction of President Abdel Fattah el-Sisi, during a meeting with Egypt’s Minister of Petroleum and Mineral Resources earlier in the day.
Aoun stated that the signing of the memorandum of understanding between Lebanon and Egypt to meet Lebanon’s needs for natural gas for electricity generation constitutes “a practical and essential step” that will enable Lebanon to increase electricity production for Lebanese citizens and residents, and alleviate the current rationing.
President Aoun thanked Minister Badawi for Egypt’s continued responsiveness to Lebanon’s needs, conveying his greetings to President el-Sisi and wishing Egypt a year of goodness, peace, and progress.
Egyptian Support and Technical Expertise
During the meeting, which was also attended by Egyptian Ambassador Alaa Moussa and his delegation, Minister Badawi expressed Egypt’s interest in Lebanon’s energy sector, as a concrete implementation of President el-Sisi’s directives and a swift response to Egyptian Prime Minister Mostafa Madbouly’s visit to Beirut days earlier.
He indicated that Lebanese-Egyptian cooperation in the field of gas will be a result of the strong relationship between the two countries, emphasizing that Egypt will provide all support to Lebanon in this field through Egyptian expertise and capabilities, particularly in the areas of gas field exploration, extraction, transportation, and distribution to industrial sectors, homes, and power plants.
He noted the establishment of joint working groups between the ministries of petroleum and energy in both countries to coordinate efforts and enable Lebanon to benefit from Egyptian expertise in the oil and gas sectors, adding that Egypt is also concerned with providing the necessary infrastructure.
