Lebanon’s new electricity deal with Syria and Jordan is a long way from being switched on

Lebanon’s new electricity deal with Syria and Jordan is a long way from being switched on
A sunset aerial view of the port of Lebanon's capital Beirut, in darkness during a power outage in October 2021 (Getty)
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Updated 26 January 2022

Lebanon’s new electricity deal with Syria and Jordan is a long way from being switched on

Lebanon’s new electricity deal with Syria and Jordan is a long way from being switched on

Plagued by constant power shortages, Lebanon’s new agreement with Jordan and Syria could be seen as a turning point for the energy-poor nation.

Yet the deal — which will see electricity flow from Syria — will not provide an immediate solution to the country’s energy problems, according to Lebanese oil and gas expert Laury Hatayan.

Speaking to Arab News, Hatayan says there are still plenty of hurdles to jump before the agreement — brokered by the US and expected to be partially financed by the World Bank — begins to help the country with its power outages.

“The deal doesn’t mean Lebanon will be provided with electricity tomorrow, as we are hearing that the World Bank has conditioned finalizing the arrangement on reforms to the electricity sector,” Hatayan said.   

The deal would supply Lebanon with 700 Megawatts of electricity in total: 250MW from Jordan and 450MW from Egypt.

With the Iraqi fuel supplies that have already kicked in and future supply by Egypt, Lebanon will be able to get a total of 10 hours of electricity per day.

This much-needed boost does not come without strings attached, according to Marc Ayoub, energy researcher and program coordinator at the American University of Beirut’s Issam Fares Institute.

“The World Bank is asking for a comprehensive reform plan of the electricity sector including loss reductions, improving bill collection and increasing electricity tariffs,” he said.

The World Bank’s regional director, Saroj Kumar Jha, has said that the exact amount of financing has not yet been determined, but the government’s initial request was $250 million, he told L’Orient Today.

Lebanon will also have to conduct repairs to the Lebanese side of a pipeline needed to import gas from Egypt, at a cost of $1million.

Additionally, Jordanian electricity to Lebanon will come at a cost of $200 million a year. 

Other hurdles are political in nature, such as US sanctions on Syria. Washington has so far ensured regional players that the deal does not fall under the Caesar Act sanctions or other US sanctions on Syria because the Syrian government will not receive any financial compensation but will be paid in kind.   

“The Egyptians are keen on getting guarantees against the Cesar Act. The Jordanians are not as wary given their strategic relations with the US,” adds Hatayan.

The deal and any electricity reforms must be approved by Parliament, which is known for its inefficiency and dissensions. 

The announcement by former PM Saad Hariri of his plan to retire from political life has cast doubt as to the fate of his current political bloc. Hariri heads the Future movement, the biggest Sunni bloc in parliament.

“For now, no reforms mean no money and deals can remain just deals (without being implemented),” highlights Hatayan.

If financing is finally secured Ayoub believes that Jordanian electricity is expected to flow to Lebanon by April or May.


EU reveals $221bn plan to cut red tape and boost renewables: NRG matters

EU reveals $221bn plan to cut red tape and boost renewables: NRG matters
Updated 13 sec ago

EU reveals $221bn plan to cut red tape and boost renewables: NRG matters

EU reveals $221bn plan to cut red tape and boost renewables: NRG matters

RIYADH: The EU steps in once again with a new package aiming to boost renewables in favor of a clean future. Switzerland is also seen working on securing storage capacity ahead of winter. Meanwhile, America’s Caterpillar Inc is eyeing the energy transition as the main driver of the mining business as a whole. Other than that, Germany’s Uniper announced that it will continue importing natural gas from Russia for another decade. 

Looking through the bigger picture: 

·      The EU has revealed a $221 billion plan which aims to cut red tape and pave the way for renewables, Bloomberg reported.  The scheme also includes plans to ramp up liquified natural gas imports and lowering energy demand to reduce dependency on Russian supplies. Under the new plan, the EU wants to raise the renewables target to 45 percent of the bloc’s energy needs by 2030. 

·      Switzerland’s government and natural gas industry have announced that they will collaborate in an attempt to bolster storage capacity in nearby countries and guarantee additional supply sources before winter arrives, Reuters reported, citing the cabinet. This comes as the European country does not own any gas storage facilities. On top of this, gas constitutes an estimated 15 percent of the country’s overall energy consumption. 

Through a micro-lens:

·      American construction machinery and equipment firm Caterpillar Inc has announced that it believes that the energy transition will be a major driver for the mining business in the years to come. In the period between 2021 and 2024, the firm is targeting a global market with an accumulated worth of $5 trillion for energy transition-related infrastructure, Reuters reported, citing the firm’s CEO Jim Umpleby. 

·      German energy firm Uniper SE has announced that it will continue to import natural gas from Russia for another ten years despite Europe’s efforts to cut dependency on the country. This comes as the firm has contracts with Russian majority state-owned gas industry company Gazprom PJSC that is set to expire in the middle of the 2030s, Bloomberg reported, citing the corporation’s CEO Klaus-Dieter Maubach.


GE to build two wind turbines in Yanbu Industrial City by end of 2022: Head of GE Saudi Arabia

GE to build two wind turbines in Yanbu Industrial City by end of 2022: Head of GE Saudi Arabia
Updated 4 min 15 sec ago

GE to build two wind turbines in Yanbu Industrial City by end of 2022: Head of GE Saudi Arabia

GE to build two wind turbines in Yanbu Industrial City by end of 2022: Head of GE Saudi Arabia
  • Separately, GE signed a memorandum of understanding with Saudi Aramco and the Saudi Electricity Company to develop a roadmap toward hydrogen and ammonia neutralization for power generation

DAMMAM: General Electric is set to build two wind turbines in Yanbu Industrial City, with a total capacity of 800 megawatts by the end of the year.

Yanbu is a port city on the Red Sea coast of western Saudi Arabia and hosts major downstream oil and petrochemicals facilities.

The area is managed by the Royal Commission for Jubail and Yanbu.

GE said it plans to accelerate its renewable production of wind turbines and hybrid battery storage, as well as solar and hydrogen-related products, in line with the Saudi green initiative.

The US-based engineering giant is also a leading manufacturer of gas turbines, which work to limit carbon emissions.

 

“GE has a record of efficient gas turbines, which we were able to achieve with our technology development,” said Hisham Albahkali, the president of GE Saudi Arabia and Bahrain, in an exclusive interview with Arab News. “We have been able to reach the optimum efficiency, which gives less pollution and less carbon.”

Albahkali explained how the firm aims to optimize the output of its gas turbine production.

He said: “Gas turbines work on fossil fuel, but the idea is to burn hydrogen. So, the output of the gas turbine won’t be combined with hydrocarbons.”

Separately, GE signed a memorandum of understanding with Saudi Aramco and the Saudi Electricity Company to develop a roadmap toward hydrogen and ammonia neutralization for power generation and carbon capture on May 16.

“We have provided Aramco and SEC with one wind turbine each, and we are participating in several solutions with them for batteries,” Albahkali added on the sidelines of the MoU signing ceremony.

FASTFACT

SME Focus

GE has enrolled around 200 local SMEs into workshop units to help them meet global energy standards.

“Human capital is important for us,” Albahkali said.

GE celebrated its 130th anniversary in April and has operated in the Kingdom for 90 years.


Half of Gazprom’s 54 clients opened Gazprombank accounts, says Russia’s Novak

Half of Gazprom’s 54 clients opened Gazprombank accounts, says Russia’s Novak
Updated 19 May 2022

Half of Gazprom’s 54 clients opened Gazprombank accounts, says Russia’s Novak

Half of Gazprom’s 54 clients opened Gazprombank accounts, says Russia’s Novak

Half of Russian gas giant Gazprom’s 54 clients have opened accounts at Gazprombank, Deputy Prime Minister Alexander Novak said on Thursday, as Moscow seeks to compel its clients to pay for its gas in roubles.

Russia halted gas supplies to Bulgaria and Poland in April after they refused to meet its demand that European buyers start paying for Russian gas in roubles, raising fears that other states could be next.

Finland’s state-owned energy provider Gasum refused to switch to the new scheme and said this week it would take its dispute over rouble payments with Russia’s Gazprom Export to arbitration proceedings.

Novak told a forum on Thursday that some big companies had already paid for Russian gas under the new scheme and that Moscow would soon know definitively which companies paid and which refused to do so.

“Gas payments under main contracts are due ... and there is information that some big companies already opened accounts, paid (gas bills) and are ready to pay on time,” Novak told a forum. “In the next couple of days we will see a final list of who’s paid in roubles and who’s refused.”

Nearly all the supply contracts EU companies have with Gazprom are in euros or dollars and some top Western companies have already opened accounts at Gazprombank.


Saudi stocks drop on mixed investor sentiment: Opening bell

Saudi stocks drop on mixed investor sentiment: Opening bell
Updated 19 May 2022

Saudi stocks drop on mixed investor sentiment: Opening bell

Saudi stocks drop on mixed investor sentiment: Opening bell

RIYADH: Saudi stocks open lower in the last trading session of the week on mixed earnings reports, which result in mixed investor sentiment.

The main index, TASI, fell 2.52 percent to reach 12,393, while the parallel market, Nomu, lost 1.51 percent at 22,487, as of 10:08 a.m. Saudi time.

United Wire Factories Co. dropped 2.35 percent, after announcing that it had extended its agreement with A-1 Fence Arabia Co.

Tabuk Cement Co. slumped 0.95 percent, after reporting it swung into losses of SR7 million ($2 million) in its first-quarter earnings as sales dropped.

United Cooperative Assurance Co. slipped 1.38 percent, after reporting its net loss was trimmed by 26 percent to SR19.9 million last quarter.

Saudi Real Estate Co. increased 3.34 percent to lead the gainers, after it received shareholder approval to increase capital to SR3.7 billion.

Rabigh Refining and Petrochemical Co. slipped 5.65 percent to lead the fallers.

Saudi Aramco, the largest player on the Saudi oil market, opened today’s trading down 2.70 percent.

In the financial sector, the Kingdom’s largest valued bank Al Rajhi edged down 2.81 percent, and Alinma Bank fell 4.76 percent.

Brent crude settled at $110.43 a barrel, and US WTI crude traded at $110.34 a barrel, as of 10:16 a.m. Saudi time.


Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs

Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs
Updated 19 May 2022

Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs

Commodities Update — Gold flat; Wheat extends gain; Copper buoyed by easing China curbs

RIYADH: Gold prices were flat on Thursday, as an elevated US dollar and rising Treasury yields weighed on greenback-priced bullion, with the metal’s outlook already dampened by an aggressive Federal Reserve stance on inflation.

Spot gold held its ground at $1,813.96 per ounce, as of 0512 GMT. US gold futures were flat at $1,813.40. 

Platinum drops

Spot silver was flat at $21.40 per ounce, while platinum dropped 0.8 percent to $927.78.

Palladium rose 0.5 percent to $2,027.38. 

Grains up

US wheat extended gains on Thursday, after India unexpectedly banned wheat exports last week, while the Russia-Ukraine war kept underpinning global grains markets.

The most-active wheat contract on the Chicago Board of Trade was up 0.89 percent at $12.41-3/4 a bushel.

CBOT wheat had climbed more than 8 percent over the past two days, following India’s wheat ban and reports showing bad condition of US winter crop.

CBOT soybeans edged up 0.95 percent to $16.78-1/2 bushel, extending gains, while corn rose 0.48 percent to $7.85-1/4 a bushel.

Copper inches higher

London copper prices inched higher on Thursday, buoyed by easing COVID-19 restrictions in top metals consumer China, although mounting worries over a global economic slowdown limited gains.

Benchmark three-month copper on the London Metal Exchange was up 0.2 percent at $9,254 a ton, as of 0702 GMT, after dropping 1.4 percent in the previous session. 

The most-active June copper contract on the Shanghai Futures Exchange ended daytime trading down 0.3 percent at $10,576.04 a ton.

LME aluminum was down 0.1 percent at $2,853.50 a ton.

(With input from Reuters)