As an offshore gas exploration rig arrives in Lebanon, experts warn hurdles ahead
As an offshore gas exploration rig arrives in Lebanon, experts warn hurdles ahead
Lebanese officials expressed optimism that gas would be find, while experts warned that the road ahead will include many logistical challenges.
3 min read
Lebanon hopes to ameliorate both its financial and energy with the discovery of offshore gas. [Getty]
An oil drilling rig arrived at 'Block 9' off the coast of southern Lebanon on Wednesday, 16 August, where it will begin drilling an exploratory well to assess the status of the area's hydrocarbon reserve.
The drilling rig, chartered by French TotalEnergies as part of a consortium with Italian ENI and QatarEnergy, is the first step in exploiting the country's potential gas reserves.
Drilling is expected to start by the end of August and conclude within two to three months.
Lebanon had been unable to explore its southern offshore reserves for years due to ongoing negotiations with its southern neighbour Israel over the boundaries of the countries' Exclusive Economic Zones (EEZs).
Upon signing a maritime demarcation deal in October 2022, caretaker Energy Prime Minister Walid Fayyad proclaimed that Lebanon "will become a petroleum-rich state."
The Lebanese Oil and Gas Initiative has estimated around US$600 billion worth of gas across Lebanon's offshore oil reserves.
Other energy experts have stressed caution when dealing with estimated figures, pointing to Lebanon's experience in 2020 when Total failed to find commercially significant hydrocarbon reserves in Block 4.
"Putting any monetary term on what might be found is pure speculation. We don't know how much we will discover, when it will be developed and how much infrastructure will be needed," Laury Haytayan, a Lebanese oil and gas expert, told The New Arab.
The proximity of Block 9 to Israel's maritime border further complicates predictions of possible gas revenues.
If all of the hydrocarbon reserves are found to reside within Lebanon's EEZ, then Lebanon is free to reap the rewards of Block 9.
If some of the hydrocarbon reserves in Block 9 cross into Israel's EEZ, Total will have to figure out a profit-sharing mechanism between the two countries.
In either scenario, infrastructure still needs to be built to extract, commercialise and potentially export gas from the offshore fields.
"For internal infrastructure, for electricity production. You need to ensure that you have enough pipelines and have the power plants as well. There's a lot of infrastructural work that needs to be done, and it needs to be decided how it will be financed," Haytayan explained.
She added that additional infrastructural hurdles will need to be faced if Lebanon wishes to export gas.
The Arab gas pipeline, which exports gas from Egypt to neighbouring countries, including Lebanon, can only import, not export gas from Lebanon.
A source in Lebanon's former maritime deal negotiation team told TNA that it would likely take upwards of seven years before Lebanon could see profits from offshore gas extraction.
Lebanon has been mired in a worsening economic and financial crisis since 2019, hamstringing the government's ability to provide basic services.
There are hopes that offshore gas could provide both a much-needed source of revenue and energy. The state power company currently provides only a few hours of electricity per day.
More In News
