Home Economics & Policy LNG – Lebanese No Go?


LNG – Lebanese No Go?

Liquified Natural Gas plant looking less likely

by Joe Dyke

One impact a serious delay to Lebanon’s oil and gas bids may have is to exacerbate a trend of the country falling behind its regional neighbors. In the early stages, something of a tug-of-war occurred between Israel and Lebanon, with both sides trying to attract Cyprus to establish a liquefied natural gas (LNG) plant with them.

Related article: How political bickering in endangering Lebanon’s oil and gas future

While Israel’s better organization was perhaps always likely to lure Nicosia, it now appears that any hopes of a Lebanese-Cypriot deal have faded. In August Cyprus, Israel and Greece signed a deal to cooperate on energy policy, just two months after Cyprus had agreed a memorandum of understanding to establish a LNG plant with two Israeli firms and US-based Noble Energy, which works extensively in Israel.

It is unlikely that Lebanon will have enough hydrocarbons to make establishing its own LNG plant worthwhile. The average set-up costs are over $4 billion, according to Walid Khadduri, energy consultant at The Middle East Economic Survey, and with the relatively small size of the Eastern Mediterranean gas-fields it may well make sense economically for Lebanon, Cyprus and Israel to share an LNG plant. This, however, is politically impossible due to the ongoing war between Lebanon and Israel. As such, Cyprus’ decision to go with Israel limits Lebanon’s options.

Lebanon’s Energy Minister Gebran Bassil was bullish when quizzed about the failure to convince Cyprus to work with them. “We don’t need that LNG plant, I am telling you we can afford a better investment plan for the companies where we don’t need that LNG,” he said. “We will have other connections. No matter what Israel and Greece and Cyprus will do, we will be in a better position.”

Experts tend to agree that the loss of an LNG plant would not be catastrophic, but it would reduce the routes the country can use for exports. “It limits your options because LNG enables you to ship your gas to whoever you want, whereas if it is only by pipeline you are limited,” Khadduri said. “If you can put your gas in a tanker and move it to wherever requires it, you have more options.”

Support our fight for economic liberty &
the freedom of the entrepreneurial mind
DONATE NOW

Joe Dyke

Joe Dyke worked at Executive from 2012 until 2014, mostly as economics and politics editor. He later worked for The New Humanitarian, Agence France Presse (AFP) and is now head of investigations at the civilian harm monitoring organisation Airwars.
--------------------------------------


View all posts by

You may also like