The Politics of Lebanon’s Gas Deal with Egypt and Syria

On June 21, 2022, officials from Lebanon, Syria, and Egypt signed a deal for Lebanon to import 22.95 billion cubic feet per year of Egyptian natural gas via a pipeline running through Jordan and Syria. The gas could generate an additional 450 megawatts of electricity, giving Lebanese homes four more hours of power a day.

Q1: Will this agreement give Lebanon reliable electricity?

A1: No. Even if this deal is fully implemented, most Lebanese homes will still endure 18 hours per day without government-supplied power. Also, the deal is a short-term fix that does little to address the corruption and dysfunction of Lebanon’s electricity sector. It will add to Lebanon’s debts, and it could actually ease pressures on the state to reform electricity supply.

Still, many will welcome the additional electricity, especially during the hot summer months, and the gas burns cleaner than the diesel, which Lebanon’s power stations and generators otherwise rely on.

Q2: Will the deal be implemented?

A2: That remains unclear. The agreement still requires U.S. approval. Although it was U.S. ambassador Dorothy Shea who announced the deal almost a year ago, Egypt and Jordan are still awaiting U.S. confirmation that they will not be subject to Caesar Act sanctions, which bar doing business with the Syrian government. Although no money will change hands, the deal allows the Syrian government to use some of the gas that crosses its territory. U.S. officials recently said that they could only confirm that the project is not sanctionable after Lebanon and Egypt signed the contract and disclosed its financial terms.

In addition, World Bank financing for the project is contingent on reforms in the Lebanese power sector, including ensuring that tariffs will be collected properly. The bank has not yet agreed that its terms have been met.

Q3: What are the politics of the deal?

A3: The deal is a product of U.S.-Iranian competition in Lebanon. Ambassador Shea announced the deal in August 2021, just hours after Hezbollah leader Hassan Nasrallah declared that he had secured fuel shipments from Iran. The United States is sensitive to Hezbollah’s accusations that U.S. sanctions cause suffering in Lebanon, and it is keen to support initiatives that visibly improve conditions for Lebanese.

This deal may also give the United States leverage over the Lebanese government in maritime border negotiations between Israel and Lebanon, which the United States leads and in which it is seeking greater Lebanese concessions.

The agreement is a win for the Assad government. The deal represents the first major move toward Syria’s economic integration with the region since Arab Spring protests shook Syria in March 2011, halting previous integration efforts. Although Syria will not receive direct payment, it will receive a portion of the gas, which will help the country tackle its own energy problems. Damascus will also gain the ability to shut off Lebanon’s gas supply, enhancing leverage over Beirut. Syria’s inclusion in the deal also confers legitimacy on Bashar al-Assad and represents a step towards Syria’s international rehabilitation.

U.S. Congress is divided on the wisdom of the deal. Earlier this year, senior Republican lawmakers wrote to Secretary of State Antony Blinken expressing “serious concerns” about the agreement, arguing that it would provide “a blueprint for circumventing Caesar sanctions in the future.” 

Will Todman is a fellow with the Middle East Program at the Center for Strategic and International Studies in Washington, D.C.

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