Saddi weighs gas switch for EDL, aims to preserve Beirut-Baghdad ties

BEIRUT — Energy and Water Minister Joe Saddi issued a partial denial Saturday evening of a report published earlier that day by the daily al-Akhbar, which is close to Hezbollah.

The article claimed Saddi was considering ending energy contracts between Lebanon and Iraq — specifically the agreement under which Iraq’s state oil company SOMO has been supplying fuel to Electricité du Liban (EDL) on a deferred payment basis since summer 2021.

In reality, while the minister is indeed exploring a shift from fuel to gas for EDL, he is not seeking to harm the strong ties between Beirut and Baghdad.

Citing a well-informed source, al-Akhbar also reported that Saddi favored a broader energy partnership with Qatar, including the construction of gasification terminals and gas-powered plants. The source said that active discussions were underway, particularly with Qatar’s ambassador to Beirut, Saoud bin Abdel Rahman al-Thani.

According to the same source, this approach aligns with the political stance of the Lebanese Forces — the main Christian party opposed to Hezbollah — which seeks to limit ties with states seen as allies of the Shiite group, a category that includes Iraq. Saddi is one of the Lebanese Forces ministers in the government of Prime Minister Nawaf Salam, formed earlier this year.

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The minister stressed that “in order to avoid any harm to Lebanon's relations with brotherly and friendly countries, especially Iraq,” he is working actively to strengthen these relations, in line with Lebanon's foreign policy.

“Baghdad was a major stop during my first Arab tour, during which I went there at the beginning of May with Finance Minister Yassine Jaber, to thank the Iraqi authorities and people for their constant support for Lebanon and to discuss ways to strengthen bilateral cooperation, especially in the energy and oil sectors,” he added.

Saddi noted that he “submitted to the Cabinet the entire file relating to Iraqi oil, as well as the issue of debts accumulated over the years in this regard, especially since Parliament has not yet ratified the second, third, or fourth contract.” He said he is working “in coordination with the finance minister to put an end to borrowing and financial commitments imposed de facto on the state, by asking EDL to buy fuel with its own revenues from bill collection.”

“From the moment I took office, I stressed the need for Lebanon to move to electricity production from gas instead of fuel, with a twofold aim: to reduce financial costs linked to supply and to limit environmental pollution,” the minister continued.

The already limited production capacity of Electricité du Liban compared to demand was cut to the bare minimum by the crisis that began in 2019. The public supplier, whose tariffs had been frozen since the 1990s at a level far below the market rate, no longer had the means to buy fuel, nor could it rely on Treasury advances to finance its structural deficit.

In summer 2021, Beirut and Baghdad concluded a fuel supply deal with deferred payment, involving a barter mechanism with third-party companies, to prevent EDL from running completely dry. This first annual contract has been renewed four times since — the latest was signed by Joe Saddi — but the details have always remained unclear, while the quantities supplied are barely enough for EDL to provide a few hours of power a day.