Lebanon will make natural gas as the primary source of energy in its power sector, informed Cesar Abi Khalil, the Energy Minister of Lebanon. There are plans of installing “three floating LNG import facilities” along with a “new offshore exploration round” scheduled for the beginning of 2019 which will be used for developing domestic gas.
Abi Khalil spoke at Barcelona’s Gastech Conference revealing that the government of Lebanon has decided on a “policy” for natural gas whereby by the year of 2030 it aims to account for “two thirds” of the country’s power mix “from effectively zero at present”. Although there are various estimated figures, still as per the expectations, Lebanon will have an annual gas demand of “4-5 Bcm” within the next decade’s end, while the country if prioritizing on “gas in the power sector alongside renewable”.
In Abi Khalil’s words: “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”.
Beirut plans of importing LNG for short term while moving away from the power generation with the use of fuel oil and moving closer to natural gas. Furthermore, a tender has been launched for companies “to provide the three FSRUs – to be moored at Beddawi (near Tripoli), Selaata (near Beirut) and Zahrani (near Tyre)”.
The bidders have been shortlisted while the winner’s name is likely to be revealed in “early 2019, while the operations on the project are likely to start in 2020, while Abi Khalil added: “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”.
On the other hand, the suppliers have shown interest in sending LNG for Lebanon when the FSRUs have begun functioning. In fact, the U.S. Federal Energy Regulatory Commission, Neil Chatterjee present at the Gastech Conference also informed that the U.S. would be prepared to send U.S. LNG to Lebanon.
The demand for power is peaking in Lebanon rapidly while the plans of building a “fleet of CCGTs along its coast” remain on the card. Syrian refugee influx is one of the reasons behind the surging power demand in Lebanon. Making an addition to six million population of Lebanon, the country has sheltered “1.5 million” Syrian refugees, informed Abi Khalil.
However, preparations are underway for a “second bidding round at the start of 2019”, while this year, Lebanon has awarded “two blocks” to a consortium which includes Total of France, Novatek of Russia, and Eni of Italy at the end of its first round. In a bid to adopt natural gas, Abi Khalil, further, stated: “We have offshore gas and this is creating new opportunities for investors, foreign friends and partners. We have formed our legal framework for regulatory issues with the companies so it is mutually beneficial.”
The exploration work by the consortium is scheduled to start in 2019 with “a first well” in the Lebanese offshore. While, the agreement signed allows the drilling of “at least one well per block in the first three years”. Also Abi Khalil informed: “The bid rounds are in line with our strategy of gasification. All this is happening so the energy mix is as balanced as possible to ensure sustainability.”