A memorandum of understanding was signed on Friday by the energy ministers of Lebanon, Egypt and Syria for the building of a $1bn gas pipeline.
Two separate companies will be established to build and operate the pipeline.One company,Al-Sharq,will be responsible for the construction and operation of a 400km sea pipeline carrying Egyptian gas from near Arish in northern Egypt to Lebanon.
The second company,the Arab Company,will undertake the construction and operation of a 400km land pipeline that will carry both Egyptian and Syrian gas.The project is expected to start in around six months.
Egyptian Energy Minister Sameh Fahmy stated that the project was estimated to cost $800m for the sea pipeline and $200m for the land pipeline.However,financing of the project has not been finalised, with the option of borrowing being considered.
Lebanese Energy Minister Mohamed Abdel Hamid Beydoun disclosed that Lebanon will import 12 million m³of gas a day from 2002 to 2005,of which 9 million m³will be supplied by Egypt and the remainder by Syria,with Egypt possibly supplying all Lebanon’s natural gas needs later.
The minister expected that the project will eventually result in Lebanon being able to save around 30 percent of its $1bn annual energy-import bill.
That $1bn figure for this year includes $350m that has been spent to cover higher oil prices.At present,Lebanon’s electricity is generated by using more expensive imported oil.
