Lebanon Is Looking For New Fuel Supply Deals

Lebanon Is Looking For New Fuel Supply Deals

Since its feud with Sonatrach, Algeria’s state-owned oil company, has been impeding its fuel imports, Lebanon is now seeking suppliers elsewhere to quench the increasing local demand for combustibles.

The Algerian company and middlemen have been accused of delivering cargos of low-quality fuel oil to Lebanon.

Currently, Sonatrach is Lebanon’s biggest supplier of the combustible, and the dispute that resulted from the accusation, which Sonatrach denies, has disrupted several fuel shipments and led to increased power outages across the country.

Now, the Lebanese authorities are looking to expand Lebanon’s network of fuel oil suppliers to end the impractical dependence on a single supplier.

“We don’t want to have one supplier giving all the fuel,” Minister of Energy Raymond Ghajar told Bloomberg. “We’d rather have several. If we run into a problem, then we can use another,” he explained.

The government is already proceeding with the measures to achieve this diversity; tender documents that permit the purchase of fuel oil starting 2021 are being prepared.

Unlike the current agreement, future suppliers will be able to secure the fuel from any country.

This will follow the expiration of Lebanon’s contract with Sonatrach at the end of 2020.

Potential future sources, so far, include Kuwait and Iraq, with both of which Lebanon has already initiated talks that have yet to reap positive results.

According to Ghajar, Lebanon usually imports 2 million tons of heavy fuel oil and 1.8 million tons of gasoil every year.

The country can generally store enough heavy fuel oil to last 20 days, gasoil for 45 days. That is to say that tanks will be full again in 2-3 weeks upon which Lebanon can resume normal power production.

The Minister noted that after the tanks fill up, areas outside Beirut will receive more electricity than usual while the capital will receive less.

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