Starved of electricity, Lebanon picks Dubai's ENOC to swap Iraqi fuel
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Lebanon-ENOC Fuel Swap secures Iraqi high sulphur fuel oil, Grade B fuel oil, and gasoil via tender, easing electricity generation shortfalls, diesel shortages, and grid outages amid Lebanon's energy crisis and power sector emergency.
Essential Takeaways
A tender-based exchange trading Iraqi HSFO for cleaner fuel oil and gasoil to stabilize Lebanon's electricity generation.
ENOC to receive Iraqi fuel Sept 3-5; deliver to Lebanon two weeks later.
Swap: 84,000 t HSFO for 30,000 t Grade B and 33,000 t gasoil.
Swaps needed; Iraqi HSFO unsuitable for Lebanon power plants.
Part of 1m t/year Iraq deal paid via goods and services.
Lebanon's energy ministry said it had picked Dubai's ENOC in a tender to swap 84,000 tonnes of Iraqi high sulphur fuel oil, as LNG export authorizations expand globally, with 30,000 tonnes of Grade B fuel oil and 33,000 tonnes of gasoil.
ENOC won the tender, part of a deal between the two countries that allows the cash-strapped Lebanese government, even as electricity tensions persist, to pay for 1 million tonnes of Iraqi heavy fuel oil a year in goods and services.
As Lebanon suffers what the World Bank has described as one of the deepest depressions of modern history, shortages of fuel this month have meant state-powered electricity, alongside ongoing electricity sector reform, has been available for barely a few hours a day if at all.
Residents turning to private generators for their power supply face diesel shortages, even as other countries roll out measures to secure electricity supplies to mitigate risks.
The swap tenders are essential as Iraqi fuel is unsuitable for Lebanese electricity generation, and regional projects like the Jordan-Saudi electricity linkage underscore broader grid strategies.
Lebanese caretaker Energy Minister Raymond Ghajar said in July the fuel from the Iraqi deal would be used for electricity generation by the state provider, even as France advances a new electricity pricing scheme in Europe, and was enough for around four months.
ENOC is set to receive the Iraq fuel between Sept. 3-5 and will deliver it to Lebanon two weeks after, the energy ministry said, following a recent deal on electricity prices abroad that could influence markets.
