0550 GMT July 05, 2022
The deal, signed at a ceremony at the Lebanon’s Ministry of Energy and Water in Beirut, would see gas piped to Lebanon's northern Deir Ammar Power Plant, where it could add some 450 megawatts, or around four extra hours of power per day to the grid.
It still requires the approval of the World Bank, which has pledged financing, and the United States for compliance with its Syria sanctions regime, Lebanon's Caretaker Energy Minister Walid Fayad told Reuters.
Fayad announced the agreement alongside representatives from Egypt and Syria, as well as Magdy Galal, chairman of the state-owned Egyptian Natural Gas Holding Company.
They did not disclose the financial terms, but Galal said Egypt would "offer an appropriate and preferential price."
Lebanon's state-run power company produces just a couple hours of power per day, forcing many to pay for expensive private generator subscriptions.
To ease the power crunch, a plan was floated last year for Lebanon to receive electricity from Jordan and natural gas from Egypt, both via Syria, which would add up to 700 MW to Lebanon's grid.
The World Bank had agreed to provide financing if Lebanon enacts long-awaited power sector reforms to reduce waste and boost tariff collection.
The transmission through war-ravaged Syria had also prompted concerns about exposure to U.S. sanctions under the wide-ranging 2019 Caesar Act, which penalises anyone dealing with the government in Damascus.
U.S. officials say they have given countries "pre-clearance" to engage in talks without the spectre of sanctions but could only fully determine compliance once contracts were signed.
Fayad said he hoped the new deal would pave the way for World Bank financing and U.S. sanctions waivers, saying "I think we did everything that they asked for."
Asked by Reuters when the gas could start flowing, he said, "Ask the World Bank. As soon as they approve the financing we're good to go."