Domestic gas production in Lebanon is set boom with the country’s energy minister Cesar Abi Khalil saying Lebanon plans on starting new rounds of offshore explorations to develop domestic gas in 2019. In fact, Lebanon aims to make natural gas its primary energy source and plans on installing three floating LNG import facilities in the near future.
While speaking at the Gastech conference in Barcelona, Abi Khalil stated, the Lebanese government has adopted a policy that will ensure that two thirds of Lebanon’s power mix is made up of LNG by 2030.
Although estimates vary as to the quantum of domestic gas production required to meet gas demand of 4-5 Bcm/year by the end of the next decade, Lebanon is prioritizing gas in the power sector alongside renewables.
“We are at a crossroads – we are a nascent province in gas but domestic production can help us meet our target of gasifying our energy sector,” said Abi Khalil.
Since Lebanon’s current domestic gas production is near zero, Beirut’s plan, at least for the short term, is to import LNG which will be used in the power sector as it weans its power industry away from dirty fossil fuels. To this effect, it has already launched a tender for companies to provide the three FSRUs, which will be moored at Zahrani (near Tyre), Beddawi (near Tripoli), and Selaata (near Beirut).
The winning bid is likely to be announced in early 2019 and operations are set to begin in 2020.
“We are planning to bring three FSRUs [to Lebanon] to fire coastal power plants on gas. This should bridge the gap from now until we have our own indigenous gas” said Abi Khalil in reference to domestic gas production plans.
According to Neil Chatterjee, commissioner of the US Federal Energy Regulatory Commission (FERC), the US would be ready to send US LNG to Lebanon.
With Lebanon seeing a rapid rise in demand for power, it plans on building a fleet of CCGTs along its coast since domestic gas production alone is unlikely to satiate the growing demand. Much of this demand can be attributed to an influx of refugees from Syria. According to Abi Khalil, Lebanon is home to 1.5 million refugees from Syria, which is a significant addition given its population of just 6 million.
So as to bring more investments and boost the energy sector in the country, Lebanon is preparing to kickstart a second bidding round towards the begining of 2019, having awarded two blocks to a consortium of France’s Total, Russia’s Novatek and Italy’s Eni later this year.
“We have offshore gas and this is creating new opportunities for investors, foreign friends and partners,” said Abi Khalil. “We have formed our legal framework for regulatory issues with the companies so it is mutually beneficial.”
Lebanon has placed its strategic energy mix on LNG and renewables which thus underscores the significance of having a robust domestic gas production strategy.
In 2009, the Lebanese government had pledged to have renewables account for 12% of its energy production by 2020 and according to Abi Khalil this has “already been achieved.” Recently the country has signed the first power purchase agreements with the private sector for wind generation and there are already ongoing tenders for solar farms with storage.
“All this is happening so the energy mix is as balanced as possible to ensure sustainability.”