The US ambassador to Lebanon, Dorothy Shea, gave Lebanese President Michel Aoun permission on Thursday to import Jordanian electricity and Egyptian natural gas through Syria.
The electricity would be generated in Jordan via natural gas imports from Egypt. It would then be transferred to Syria and on to Lebanon. In addition, some amount of natural gas would be sent to Lebanon.
US approval for the deal was likely needed to avoid any consequences from the US Caesar Act, which imposes sanctions on any party who engages in significant business with the Assad regime in Syria.
No additional details were given about the specifics of the deal, including how much electricity and natural gas would be supplied, at what cost, and when the project might be implemented. However, a statement given by President Michel Aoun said that negotiations were ongoing in the World Bank to fund the cost of the natural gas.
Local media outlet Al-Akhbar first reported in mid-July on the existence of the deal, citing anonymous Egyptian sources. The report said that Lebanon would receive Egyptian natural gas at a 50 percent discount and that Jordan and Syria would be compensated for transporting it.
None of these claims have yet to be confirmed by official sources.
The news came just a few hours after Hezbollah leader Hassan Nasrallah announced that a ship carrying diesel would soon depart from Iran towards Lebanon. In his speech, Nasrallah addressed the US and Israel, telling them that the ship is considered "Lebanese territory".
The round-about system of supplying electricity is due to the lack of interconnectivity of Jordan and Lebanon's power grid. While Jordan and Syria, and Lebanon and Syria, have connected power grids, there is no direct hook-up between Jordan and Lebanon. As such, Jordanian electricity would have to first pass through Syria to reach Lebanon.
In addition, while Jordan has an excess capacity to generate electricity, it has a fuel deficit. The Egyptian natural gas will be used to generate surplus electricity to be sent to Lebanon.
Lebanon has been undergoing a severe fuel shortage for months, with importers unable to pay the cost of bringing in fuel. The Central Bank of Lebanon (BDL) announced on 11 August that fuel subsidies would be lifted as the bank's foreign reserves - used to fund the subsidies - could no longer be used without dipping below the mandatory ratio relative to deposits.
As a result, the fuel shortage was exacerbated and its price on the black market skyrocketed overnight. Many businesses have shut across the country as they could not afford the cost of black-market fuel necessary to get electricity to their shops.