Lebanon To Have Floating LNG Plant.

Lebanon is to have a floating LNG receiving and regasification terminal to feed natural gas directly to the country's power stations, Energy and Water Minister Mohammad Fneish was recently quoted as saying: "The Ministry of Energy is currently negotiating with a number of companies to establish a floating LNG plant which will convert liquefied natural gas from tankers to fuel, which would then be piped to power plants". Fneish said the ministry was discussing "details and prices with a few companies", adding that the results of the negotiations will be announced "soon" without giving any timetable.

Lebanon has been trying to adopt an alternative energy programME for years, by diversifying its fuel sources and reducing its dependence on imported oil. With the government shouldering the mounting losses of Electricite du Liban (EdL) - which meets Lebanon's annual energy consumption requirements using oil imports - the need to switch to gas has become even more pressing. "It is our strategic decision to switch to natural gas to produce electricity", Fneish said. As part of the new energy strategy, Lebanon plans to build a natural gas pipeline along the coast to feed all its power plants.

Up to 2004 the Beirut government did a lot of preparatory work to establish an offshore national gas transmission pipeline from the north to the south. But the efforts were halted for political reasons. For gas supplies to be harnessed, The Natural Gas Master Plan and The Natural Gas Transmission Law, both of which have been sitting in the drawers of the government for years, need to be reactivated. Other plans include importing natural gas from Syria through a pipeline, which has already been built in the north of Lebanon to feed the Badawi power plant. Supplies will not start before 2007 according to Syrian officials. Another project in the works is construction of an Arab gas pipeline which would move natural gas from Egypt to Jordan, Syria and eventually Lebanon, Turkey and Europe. According to Bahij Abu Hamzeh, head of the Union of oil companies in Lebanon, there are serious fears that the Arab pipeline would be established in Syria and then Turkey without going into Lebanon. Abu Hamzeh explained that "the reasons would probably be political disputes with Syria". Lebanon had signed agreements with Egypt to receive natural gas through this pipeline and urged the authorities to follow up with the Egyptian government on the progress of these accords.

An LNG plant will ensure security of future fuel supplies, which are increasingly vulnerable to instability in oil-producing countries. Imports of LNG could be purchased from Egypt, Algeria and/or Qatar. Natural gas has important economic benefits over fuel oil. In a study conducted for the Beirut governement in 2003 for the energy needs of the Zahrani and Beddawi power plants, using gas instead of oil saves both power plants $84m per annum. Now, with increase of oil prices, the saving would exceed $178m per year. Operational costs and the life-span of the plant equipment will significantly decrease when natural gas is used. Moving from oil to gas will also benefit the environment, since burning gas releases less toxic waste and contributes to realising a final solution to the acid rain problem in the Mediterranean basin.