Egypt to supply gas to Lebanon again

Egypt and Lebanon have signed a memorandum of understanding (MoU) under which Cairo will supply natural gas to Lebanon’s Deir Ammar power plant, reviving a long-stalled effort to stabilize the country’s electricity sector by shifting away from costly fuel oil. Under the agreement, Egypt has begun delivering approximately 50 million cubic feet of gas per day through the Arab Gas Pipeline, shortly after initiating similar shipments to Syria. Volumes are expected to rise during the winter, when electricity demand increases.

The deal represents Lebanon’s latest attempt to mitigate its chronic power shortages, which have persisted despite decades of public spending and repeated reform pledges.

How the gas reaches Lebanon

The gas flowing into Lebanon is not sourced exclusively from Egyptian fields. Instead, Egypt is receiving liquefied natural gas (LNG) cargoes from international suppliers, which are regasified at a floating storage and regasification unit in Aqaba, Jordan, before being transported north through the regional pipeline network into Syria and Lebanon.

Energy analysts say the gas entering Lebanon could originate from multiple international producers, potentially including suppliers from the Gulf. This underscores Egypt’s growing role not merely as a producer, but as a regional processing and transit hub, a position it has been cultivating as part of a broader strategy to dominate the eastern Mediterranean’s gas trade through its unique liquefaction and regasification infrastructure.

Oil and gas expert Christina Abi Haidar says the Egyptian gas agreement is “very positive,” especially from an energy security perspective. “We are always calling for diversified energy sources. Every additional source reduces risk. Relying on one supplier makes the system extremely vulnerable,” she said. She also pointed to the economic and environmental benefits of gas. “Gas is cheaper than fuel oil and less polluting, and Deir Ammar is already technically ready to generate electricity using gas. This is something we’ve been waiting for for a long time.”

But Abi Haidar stressed that political agreements alone are not enough. “There are two things we need to monitor very carefully: the technical side and the financial side.” On infrastructure, she warned that the pipeline needs rehabilitation after years of limited use. “We need to make sure the pipeline is in good condition to allow stable gas supply, and we still don’t know who will pay for the repairs across the different countries.”

Financial terms are also unclear. “We need to know the price of the gas and how much Jordan and Syria will take for transit. Before, Syria was expected to take a gas supply instead of cash, which would reduce the volume reaching Lebanon, but we don’t know if this still applies.”

She added that long-term planning is critical. “Today Lebanon depends almost entirely on Iraqi fuel. When a shipment is delayed, we go into blackout. That’s why diversifying energy sources is not just positive, it’s necessary.”

A sector long defined by failure

Lebanon’s electricity sector has been one of the state’s most costly and dysfunctional institutions. Since the end of the civil war in 1990, it has absorbed more than $40 billion in public funds, yet power cuts remain a daily reality. Households and businesses continue to rely on private generators and, increasingly, solar power to compensate for persistent grid failures.

International Financing and Regional Diplomacy

The gas deal comes as Lebanon remains heavily dependent on international support to prevent further deterioration of its energy infrastructure. In April, Beirut signed a $250 million agreement with the World Bank to modernize the electricity sector, improve governance, and reduce technical and financial losses across the grid.

For Egypt, the arrangement is framed as part of a wider regional commitment to Arab energy security. Officials in Cairo have underlined that energy diplomacy is now a key instrument in shaping political and economic ties across the Middle East.

A narrow opening

Reliable gas supply, combined with international financing and renewed regional coordination, offers Lebanon a rare opportunity to move beyond emergency measures. If infrastructure upgrades and governance reforms are implemented as planned, the country could begin shifting from ad-hoc power generation toward a more stable and sustainable electricity system. For a country long defined by institutional paralysis, even incremental progress in electricity production represents a significant test of whether recovery remains possible.