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French Version

Syrian gas to power Lebanon

Price of electricity may eventually fall as oil-fired plants change fuel

Syria said Monday it will start supplying Lebanon with natural gas in the middle of this year, suggesting the price of electricity may eventually fall.

"Electricity prices in Lebanon are only temporary because in the middle of this year Syria will start sending natural gas to the country," Syria's Electricity Minister Ghassan Tayara told a group of Lebanese businessmen, industrialists and officials.

Tayara is part of a Syrian delegation visiting Lebanon to discuss economic cooperation between the two countries.

Syria was supposed to supply natural gas to Lebanon in 2002 through a pipeline but due to technical difficulties the agreement never materialized.

Lebanon, which has one of the most expensive electricity rates in the region, built two power plants in 1996 that run on gas at a cost of more than $600 million.

But the power plants continued to partially run on fuel oil because the government did not complete the network.

In addition, efforts to build a gas pipeline from Syria to the power plants in Tripoli and Zahrani reached an impasse due to lack of funds and bureaucratic difficulties.

The cost of kilowatts in Lebanon is three times higher than in Syria, Egypt and Turkey.

Syria also promised to supply Lebanon with electricity from its power plants.

Lebanon will also receive electricity in the coming few years after joining the regional power grid which includes Syria, Jordan, Egypt and Turkey.

The high prices of fuel oil represents nearly 70 percent of the total cost of Electricite du Liban (EDL), the state run electricity firm.

EDL officials say even if electricity bill collection improved and electricity theft came to an end, the company will continue to loose money due to the high prices of fuel oil.

They added that the only way to reduce the cost of energy was to shift from fuel oil to natural gas.

Tayara said the prices of fuel oil in Lebanon are not even compatible with international prices, adding that the fuel oil speculation in the country may be one of the reasons.

The head of the Associations of Lebanese Industrialists Fady Abboud said local industrialists can no longer afford to stay in business as long as the prices of energy remain high.

EDL suffers an annual loss of more than $350 million.

The government is still financing the operations of EDL through soft loans.

Beirut,02 07 2005
Osama Habib
The Daily Star
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