Identifier
Created
Classification
Origin
09BEIRUT658
2009-06-12 13:56:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Beirut
Cable title:  

LEBANON: EGYPT WILL SUPPLY LEBANON WITH NATURAL GAS

Tags:  ECON EFIN EAIR EIND PGOV KFLU LE 
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VZCZCXYZ0000
RR RUEHWEB

DE RUEHLB #0658/01 1631356
ZNR UUUUU ZZH
R 121356Z JUN 09
FM AMEMBASSY BEIRUT
TO RUEHC/SECSTATE WASHDC 5117
INFO RUEHEE/ARAB LEAGUE COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RHEHAAA/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
UNCLAS BEIRUT 000658 

SIPDIS

SENSITIVE

STATE FOR NEA/ELA AND EEB/IFD/ODF
STATE PASS USTR FRANCESCKI
STATE PASS USAID LAUDATO/NANDY/SCOTT
TREASURY FOR PARODI/BLEIWEISS/AHERN
USDOC FOR 4520/ITA/MAC/ONE
NSC FOR SHAPIRO/MCDERMOTT

E.O. 12958: N/A
TAGS: ECON EFIN EAIR EIND PGOV KFLU LE
SUBJECT: LEBANON: EGYPT WILL SUPPLY LEBANON WITH NATURAL GAS
STARTING IN AUGUST (ECONOMIC WEEK IN REVIEW, JUNE 1 - 7, 2009)

CONTENTS
--------

-- EGYPT WILL SUPPLY LEBANON WITH NATURAL GAS STARTING IN AUGUST
-- CABINET PASSES PART OF THE BUDGET
-- THREE CONFIRMED CASES OF SWINE FLU HAVE FULLY RECOVERED
-- WORLD BANK BEGINS DISCUSSIONS ON NEXT COUNTRY PARTNERSHIP
STRATEGY
-- GOL LAUNCHES SECOND PHASE OF THE BEIRUT-DAMASCUS HIGHWAY...
-- ...AND THE EXPANSION OF TRIPOLI PORT


EGYPT WILL SUPPLY LEBANON WITH
NATURAL GAS STARTING IN AUGUST
--------------------

UNCLAS BEIRUT 000658

SIPDIS

SENSITIVE

STATE FOR NEA/ELA AND EEB/IFD/ODF
STATE PASS USTR FRANCESCKI
STATE PASS USAID LAUDATO/NANDY/SCOTT
TREASURY FOR PARODI/BLEIWEISS/AHERN
USDOC FOR 4520/ITA/MAC/ONE
NSC FOR SHAPIRO/MCDERMOTT

E.O. 12958: N/A
TAGS: ECON EFIN EAIR EIND PGOV KFLU LE
SUBJECT: LEBANON: EGYPT WILL SUPPLY LEBANON WITH NATURAL GAS
STARTING IN AUGUST (ECONOMIC WEEK IN REVIEW, JUNE 1 - 7, 2009)

CONTENTS
--------------

-- EGYPT WILL SUPPLY LEBANON WITH NATURAL GAS STARTING IN AUGUST
-- CABINET PASSES PART OF THE BUDGET
-- THREE CONFIRMED CASES OF SWINE FLU HAVE FULLY RECOVERED
-- WORLD BANK BEGINS DISCUSSIONS ON NEXT COUNTRY PARTNERSHIP
STRATEGY
-- GOL LAUNCHES SECOND PHASE OF THE BEIRUT-DAMASCUS HIGHWAY...
-- ...AND THE EXPANSION OF TRIPOLI PORT


EGYPT WILL SUPPLY LEBANON WITH
NATURAL GAS STARTING IN AUGUST
--------------


1. (U) Minister of Energy and Water Alain Tabourian announced the
signing on April 30 of an agreement with Egypt, whereby Egypt will
supply Lebanon with a total of 600 cubic meters of natural gas per
year. This agreement is part of the regional power grid project,
which includes Lebanon and Egypt. As a first step, starting in
August 2009, the supply of gas will be used to operate half of the
capacity of the Beddawi power station in the north, and by October,
Lebanon is expected to receive enough gas to run the entire station.
Tabourian said that by using natural gas instead of fuel oil,
Lebanon could save up to $200 million a year. The agreement set a
fixed price at which Egypt will supply gas and also called on
Lebanon to encourage the use of natural gas in local industries and
households. Following the June 7 parliamentary election, the
process now begins to select a new prime minister and cabinet.
Beginning June 21, Tabourian and all other ministers will be in a
caretaker government status until the new cabinet is selected.


CABINET PASSES
PART OF THE BUDGET
--------------


2. (SBU) During its last session before the parliamentary elections,
the cabinet separated the budget for the Ministry of Health from the
2009 budget law and endorsed it on June 2. This is the first time

in Lebanon's history that the cabinet has passed only a portion of
the budget law, and it is unclear whether the cabinet will forward
just this portion of the budget to the new parliament. (Comment:
The budget process is already far behind. The Lebanese constitution
mandates that the cabinet pass a budget law for the following year
by September, and send it to parliament for approval before the end
of the year. The passage of part of the budget nine months late is
par for the course in the Lebanese system. End comment.)

THREE CONFIRMED CASES OF SWINE
FLU HAVE FULLY RECOVERED
--------------


3. (SBU) On May 30, Minister of Public Health (MOPH) Mohammad
Khalifeh announced that three cases of swine flu had been confirmed
in Lebanon. One Lebanese residing in Spain and two Canadians
entering Lebanon suffering from the flu were given the proper
medical treatment in time and have now fully recovered, according to
an advisor to the Minister. The advisor added that the ministry is
implementing all WHO recommendations related to the flu and
distributing brochures at Beirut International Airport for
awareness. Ministry representatives based at the airport are also
available in case of an emergency.

WORLD BANK BEGINS DISCUSSIONS ON
NEXT COUNTRY PARTNERSHIP STRATEGY
--------------


4. (SBU) On June 3, Chris de Clerq, UNDP Project Manager at the
Finance Ministry, told us that World Bank Country Manager Demba Ba
and Director for the Middle East Department Hedi Larbi met on June 2
with Finance Minister Chatah to discuss the framework for the World
Bank's assistance to Lebanon for the next five years, taking into
account the GOL's Paris III reform pledges, the recent
Cabinet-approved measures to counter the impact of the global
financial crisis, as well as the GOL's regional development vision.
Bank officials will also meet with representatives of the private

sector and civil society and will complete their report in
September, to be approved by the Banks' Executive Board in
February/March 2010, de Clerq said.


5. (SBU) De Clerq added that since the July 2006 war, the Bank's
assistance to Lebanon has been based on an interim strategy note
that expires in June 2009. Bank officials informed Chatah that they
will discuss an interim arrangement on financial and technical
assistance with the new government to cover the period until the
Bank's Board approves the new Country Partnership Strategy, de Clerq
said.

GOL LAUNCHES SECOND PHASE OF
THE BEIRUT-DAMASCUS HIGHWAY...
--------------


6. (SBU) The GOL launched the second phase of the Arab Highway
project linking Beirut to Damascus, when Prime Minister Siniora laid
the cornerstone for the Mdeirej to Taanayel strip in the Bekaa last
month, Dr. Wafaa Charafeddine, advisor to Council for Development
and Reconstruction (CDR) Chairman told us June 1. The project is to
cost $153 million and will be financed by a $40 million grant from
Saudi Arabia and soft loans from the Saudi Development Fund and the
OPEC Fund for International Development. Construction of the first
phase of the Arab Highway linking Taanayel to Masnaa (border with
Syria) is on-going, financed by a soft loan from the European
Investment Bank (EIB),she said. The Arab Highway will expedite the
transport of Lebanese exports and transit goods to Damascus and from
there to Jordan, Saudi Arabia, and the Gul, Ministry of Public
Works and Transport director general Abdel Hafeez Kayssi told us
June 1.

..AND THE EXPANSION
OF TRIPOLI PORT
--------------


7. (SBU) The expansion and development of the northern Tripoli Port
is expected to resume, as the GOL recently resolved its conflict
over technical and financial issues with the Chinese company working
on this project, Kayssi told us. He said the GOL has also tasked
the company to further dredge the quay from 12 to 15 meters in order
to enable large ships to dock. As a result, the cost of the Tripoli
port expansion project increased to $50 million, entirely financed
by a soft loan from the European Investment Bank (EIB). This
project is vital for economic development and job creation in
northern Lebanon, said Kayssi, especially with the GOL's plan to
create an industrial and Special Economic Zone in Tripoli. This
project will enable the Tripoli Port to compete with the Syrian
ports of Lattaquieh and Tartous by attracting large ships carrying
goods primarily for Iraq, former Chairman of the Tripoli Port
Antoine Habib told us June 2.

SISON