Gas sector a catalyst for further cooperation between Lebanon and Egypt - EXECUTIVE MAGAZINE

Nada Boustani, Lebanon's Energy Minister

August 7, 2019

Mona Sukkarieh

The first six months of 2019 saw an unusual series of meetings between Lebanese and Egyptian officials, with energy cooperation at the core of these discussions. If memory serves well, the frequency is unprecedented.

The option of resuming gas imports from Egypt was discussed extensively, especially during the first meetings of 2019. Lebanon previously imported natural gas from Egypt in 2010 via the Arab Gas Pipeline (AGP) to generate electricity. But supplies were interrupted after a few months with various reasons touted (such as Egypt’s inability to pursue exports because production was barely enough to meet local demand, instability in Egypt, and attacks against the pipeline). With the formation of a new government on January 31, Lebanese officials explored the possibility of quickly resuming imports as they scrambled to find solutions to the problems plaguing the electricity sector. The dire state of Lebanon’s power sector and the burden it places on the economy propelled it to the forefront of the government’s reform agenda. Government officials examined the option of importing gas by pipeline from Egypt to generate electricity—in addition to the possibility of buying electricity from Jordan in exchange for water—as among the possible solutions that they thought could be implemented quickly.

The Eastern Mediterranean Gas Forum: A Lebanese perspective - MIDDLE EAST STRATEGIC PERSPECTIVES / EXECUTIVE MAGAZINE

February 6, 2019

Energy Ministers from Egypt, Cyprus, Greece, Israel, Italy, Jordan and the Palestinian Authority took an important step in Cairo toward establishing an Eastern Mediterranean Gas Forum (EMGF) on January 14. According to the declaration that followed the meeting, the EMGF will, among other things, assist in the creation of a regional gas market, ensure security of supply and demand, optimize resource development, facilitate the use of existing infrastructure and build new ones if necessary, etc. Intra-regional cooperation in this part of the world was at best marginal before the discovery of major hydrocarbon resources. Since 2009, shared interests and a series of gas discoveries have encouraged dialogue. The EMGF appears to be the first tangible result of these new regional dynamics.

The Forum’s raison d’être is regional energy cooperation. Almost ten years to the day after the announcement of the discovery of Tamar (January 17, 2009) – the first major gas discovery in the Levant Basin – it has become increasingly clear that regional cooperation is needed to make the most out of the region’s resources. The Eastern Mediterranean’s gas potential is promising. But, beside Egypt, the countries in the region have to deal with a number of challenges to exploit their resources. First, these resources are mostly offshore, in deep and ultra-deep waters. When found in commercial quantities, their extraction is expensive. Second, the relevant infrastructure to monetize these resources is quasi-inexistent (outside Egypt).