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French Version

Ukrainian firm clinches pipeline contract - Beydoun inks deal to import Syrian gas

The Daily Star

Energy and Water Minister Mohammed Abdel-Hamid Beydoun signed a $12.9 million contract Wednesday with a Ukrainian firm, Ukrainian State Corporation, to build a pipeline to pump Syrian natural gas into Lebanon by the end of 2003.
The pipeline would carry some 1.5 million cubic meters of Syrian natural gas to the Deir al-Ammar/Beddawi power plant in North Lebanon, one of two utilities that have been built to run on natural gas or diesel.

Lebanon signed an agreement with Syria in 2001 to buy an initial 1.5 million cubic meters of natural gas a day to run the Beddawi power plant, which has a capacity of around 450 megawatts.

The agreement stipulates the construction of a 45-kilometer pipeline, 33 kilometers in Lebanon and the remainder in Syria. The Syrian part of the pipeline has already been constructed, while the Lebanese part is expected to be completed in the next 11 months. The Ukrainian State Corporation won the bid by offering the cheapest deal, beating out six other firms.

This is the first government contract to be signed with a Ukrainian firm and comes on the heels of Ukrainian President Leonid Kuchma's visit to Lebanon last year, the Energy Ministry said. "The Deir al-Ammar station should be up and running on gas for sure by 2004," said Beydoun. "Switching to gas will help save production costs at the plant, which are currently high due to the use of diesel oil."

The Lebanese government is trying to switch power consumption from costly diesel fuel to environmentally friendly natural gas in a bid to trim its high energy bill of $1 billion per year. Beydoun secured a special price for Syrian gas from the Syrian Petroleum Company - a 20 percent discount for the first year of supply and 15 percent for the second year - and hopes to secure more Syrian gas in a bid to switch the second dual-fuel power plant at Zahrani in South Lebanon to gas. Zahrani would require another 1.5 million cubic meters of gas per day.

Lebanon's 2001 agreement with Syria leaves the option open for Lebanon to buy up to 6 million cubic meters of gas, which is about half of Lebanon's requirement for switching all seven of its power plants to gas."Switching to gas would save up to 25 percent of the government's energy costs, which amount to $450 million a year," said Beydoun.

The government considered the idea of importing liquefied natural gas from Qatar to supply the Zahrani station. "We have currently shelved the LNG project because it requires a feasibility study and financing," Beydoun said.

The other option is to import natural gas from North Africa, particularly from Egypt, through a proposed gas pipeline running through Egypt, Jordan, Syria and Lebanon."The option we are currently studying is buying gas from Egypt through the Arab gas pipeline, but this is unlikely to take place before 2006 or 2007," the minister said. In 2002, Jordan, Egypt, Syria and Lebanon signed a $1 billion agreement to build the proposed Arab gas pipeline.

Beirut 13-02-2003
Dania Saadi
The Daily Star

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