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ROSNEFT has abandoned its contract to develop oil storage facilities in Tripoli, which were supposed to stock 450,000 tons of petroleum derivatives. The contract, signed in January 2019 under the sponsorship of then-Minister of Energy Cesar Abi Khalil, had a lifespan of 20 years and required an investment of $30 to $50 million to set the project on track.
The Russian company’s withdrawal from the project was reportedly due to sanctions imposed on Russia following the outbreak of the war in Ukraine on February 24, 2022. Although ROSNEFT adhered to the contract for three years, no significant steps were taken to implement it. There was an initial tender for secondary companies to start the process of repairing the storage tanks, and two companies – one Lebanese and one Egyptian – qualified for the job. However, the project did not proceed to implementation. After ROSNEFT’s withdrawal, officials at the Ministry of Energy reportedly sought to retrieve the project file, only to be told it was lost.
When the contract was originally awarded to the Russian company, it aligned with the political strategy of the Free Patriotic Movement (FPM), which was allied with Hezbollah and supported a shift toward Russia and China. The United States Embassy in Lebanon had expressed concerns and objected to the contract, suspecting that there might be concealed motives behind it.
The search for an alternative to ROSNEFT does not seem to be a priority for the Ministry of Energy. However, there have been reports that officials from Emirates National Oil Company (ENOC) expressed interest in studying and discussing the project. But when this was presented to the current minister of energy, he reportedly dismissed the company due to potential political sensitivities, and the discussions did not go further.
It was also revealed that before ROSNEFT withdrew from the project, Lebanese officials had proposed that the Russians sell two shipments of fuel oil to Lebanon’s electricity company, Électricité du Liban (EDL), and that the money from the sale be used to develop the Tripoli storage facilities. The Russian side, however, rejected this proposal for unspecified reasons.
The failure of this project revives concerns about Lebanon’s need for a strategic reserve of petroleum derivatives to manage fuel crises during both peacetime and wartime. Such a reserve could also help avoid electricity crises. Discussions have reportedly taken place within the EDL board of directors about the possibility of EDL using its own funds to repair the Tripoli facilities. This would allow it to import and store surplus quantities of fuel and gas oil to avert power outages due to depletion of diesel that led to the stoppage of the Deir Ammar and Zahrani power plants.
