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Lebanon told to cut electricity costs - Pipeline projects could transform sector (Daily Star)

For the GASYLE I pipeline and Arab Gas Pipeline projects to succeed, Lebanon needs to improve its electricity distribution system by cutting illegal connections and better managing the system through modern power plants and cheaper energy resource supplies, according to the European Commission vice-president in charge of energy and transport, Loyola de Palacio.

"The two pipeline projects are closely linked to the 'gasification' of the Lebanese power plants, and this depends on the efficacy of the local electric system," said Palacio at a news conference at the Commission's Beirut headquarters. "And to attain a more efficient electrical distribution system, the Energy Ministry must first cut all illegal electrical connections so that Lebanon's electricity prices, among the world's highest, can be decreased to the advantage of customers and industrialists."

The Energy Ministry plans to transform most of its gas-oil burning power plants to burn natural gas. Natural gas is cheaper and more environmentally friendly, and this "will improve returns for Electricte du Liban and lower prices for customers," said Palacio.

The GASYLE I pipeline will let Lebanon supply itself with this efficient fuel from Syria. The Arab Gas Pipeline would transport gas from Egypt to Europe via Jordan, Syria and Lebanon. Syria and Lebanon will both become transit countries, as all the natural gas flowing from Egypt - and later on, from Iraq - will pass through them to Turkey and Cyprus.

However, as Palacio said, Lebanon "must put its house in order before such a big project can be called successful."

Not only does Lebanon have one of the world's highest prices for electricity price - $0.137 per kilowatt hour - but it still experiences regular blackouts in some areas, and reports electricity theft of a staggering 23 percent of production.

Energy Minister Ayoub Humayed also underlined the urgent need to set up the regulation of the electricity system and the nomination of a regulator so that all reforms are done adequately and fairly.

Beirut 24-05-2004
Tarek El Zein
The Daily Star



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