Gas pipeline construction set to start in 2013

19 companies were prequalified for project

A project to build a coastal gas pipeline interconnecting major power plants across the country will be launched in 2013. Zaher Sleiman, consultant at the Ministry of Energy and Water (MoEW), said the 173-kilometer-long pipeline will connect the Beddawi power plant in the north to the Zahrani plant in the south, reaching Tyr.

The MoEW will select the company to undertake the pipeline construction in a few months. “19 companies have already been shortlisted for the project,” said Sleiman. The pipeline network is expected to take around two years for completion. The estimated cost of the plan is around $455 million. It will be funded by a three-year financing law that has yet to be ratified.

The pipeline network will later be annexed to a Floating Storage and Re-gasification Unit (FSRU) for treating imported liquefied gas. Sleiman said that having an offshore re-gasification unit is the fastest and most convenient solution for supplying the country with natural gas as it requires a low upfront capital expenditure. He said the government could hire an FSRU for a period of 12 years.
The MoEW released an expression of interest for the FSRU project in April. It aims to select a developer by the first quarter of 2013. The FSRU is expected to be commissioned by mid-2015, right after the completion of the pipeline network.

Sleiman said Lebanon will be a good consumer of natural gas for energy production by 2015. “Major consumption of fuel and oil derivatives will eventually be replaced by natural gas by 2015,” he said. According to the MoEW, expected savings starting in 2016 will exceed $1 billion per year in the electricity sector and $2 billion per year in all other sectors.

Lebanon can import liquid gas by sea from Qatar, Yemen, Algeria, and Egypt. In a 2010 study commissioned by the World Bank, US-based firm ‘Poten & Partners’ had recommended that Lebanon import liquid gas from these countries and construct a floating storage re-gasification unit. The cost of constructing the unit was estimated at around $200 million at the time.