Lebanon Seeks More Fuel Suppliers to Avoid Power Blackouts

Lebanon Seeks More Fuel Suppliers to Avoid Power Blackouts

Lebanon is seeking to diversify its fuel suppliers after a dispute with Algeria’s Sonatrach caused shortages at its power plants.

The government is preparing tender documents for the purchase of fuel oil staring in 2021, with the contracts to last for around three years, according to Energy Minister Raymond Ghajar. Unlike the current arrangement, suppliers will be able to source fuel from any country.

“We don’t want to have one supplier giving all the fuel,” said Ghajar in an interview on July 30. “We’d rather have several. If we run into a problem, then we can use another.”

Sonatrach and local middlemen are accused of shipping a cargo of low-quality fuel oil to Lebanon. While the company denies any wrongdoing, the dispute has disrupted several deliveries and led to electricity outages. Lebanon is importing only half as much oil as usual for this time of year, according to Ghajar.

Lebanon will continue to receive fuel oil from Sonatrach, the state power company’s biggest supplier, until a contract between the two sides expires at the end of 2020, said Ghajar.

In the interview, the minister also said:

  • Talks with Kuwait and Iraq over fuel supplies are ongoing, but there’s no agreement in sight
  • Lebanon usually imports approximatley 2 million tons of heavy fuel oil, 1.8 million tons of gasoil per year
    • Able to store enough heavy fuel oil for 20 days, gasoil for 45 days; tanks will be full again in 2-3 weeks
  • Lebanon can then resume normal power production within 2-3 weeks
    • Areas outside Beirut to receive more electricity than usual, Beirut to get less
  • Lebanon’s 2nd oil and gas licensing round postponed because of the coronavirus pandemic
    • “If we find by the end of this year that there’s no interest to relaunch the second round, we may cancel it and then do something different
    • “We may actually change the blocks for round two, we may extend it into 2021”
  • NOTE, July 30: Lebanon’s Late Bills to Turkish Firm May Worsen Power Crisis (1)

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