Lebanon, Egypt sign memorandum of understanding to 'meet Lebanon's needs for natural gas'

BEIRUT — Lebanon and Egypt signed a memorandum of understanding at the Egyptian Embassy to “meet Lebanon’s needs for natural gas dedicated to electricity generation from the Egyptian side," to increase electricity production and "help reduce power rationing," the Presidency said Monday.

The agreement was signed during a meeting attended by President Joseph Aoun, Egypt’s Petroleum Minister Karim Badawi, Egyptian Ambassador to Lebanon Alaa Moussa, and the accompanying delegation, but no timeline was mentioned regarding when the gas will be supplied to Lebanon.

President Aoun thanked Badawi for “Egypt’s continued responsiveness to Lebanon’s needs.”

Badawi briefed Aoun on Egypt’s “strong interest in Lebanon’s energy file,” noting that this interest reflects directives from President Abdel Fattah al-Sisi and is a swift outcome of the recent visit by Egyptian Prime Minister Mostafa Madbouly to Beirut.

Badawi emphasized that Egypt “will provide full support to Lebanon in this field through its expertise and capabilities in several areas, including the exploration of gas fields, production, transportation, and distribution to industrial sectors, households, and power generation plants.”

In 2022, a U.S.-backed initiative proposed an Egypt-Lebanon gas deal, under which Egypt would supply natural gas via pipeline through Jordan and Syria to help boost Lebanon’s struggling electricity supply and increase daily power availability.

However, the deal never materialized because Syria, under the control of President Bashar al-Assad, was subject to heavy U.S. sanctions, preventing Egyptian fuel from reaching Lebanon.

Meanwhile, last week Israel and Egypt finalized a $35 billion natural gas export deal, the largest in Israel’s history, which will see Israel supply Egypt with approximately 130 billion cubic meters (bcm) of gas through 2040.

The public electricity provider in Lebanon does not have sufficient production capacity or funding to supply electricity 24 hours a day to all its subscribers, whether households, businesses, or infrastructure.

These structural shortcomings, which had existed for decades and encouraged the proliferation of private generators, worsened with the crisis that began in 2019.

In 2022, a U.S.-backed initiative proposed a gas agreement between Egypt and Lebanon, involving the transport of Egyptian natural gas via pipeline through Syria, alongside the delivery of electricity generated in Jordan, also via Syria, in order to increase the number of hours of electricity supplied per day in Lebanon.

However, this project never materialized, as Syria, then under President Bashar al-Assad, was subject to heavy U.S. sanctions, preventing the transport of Egyptian fuel to Lebanon.

The situation has changed since the former leader was overthrown by a coalition of Islamist rebels, and, in mid-December, the U.S. Congress approved the permanent lifting of sanctions against Syria.