Caretaker Minister of Energy Walid Fayad and Iraqi Oil Minister Hayan Abdel Ghani signed two memorandums of understanding at the Iraqi Ministry of Oil on Friday afternoon. The first concerns the renewal of the contract to supply Lebanon with petroleum derivatives, increasing the quantity from 80,000 to 150,000 tons per month. The second involves supplying Lebanon with two million tons of crude oil at an annual cost of approximately $1,200 billion.
It should be noted that Lebanon and Iraq signed an agreement on 23 July 2021, under which Iraq supplies fuel to Lebanese power plants on terms that are advantageous to Lebanon. This agreement came into force in September 2021, with a quantity of fuel set at 100,000 tons per month (80,000 tons usable by the power plants due to the swap). As Iraqi fuel cannot be used directly in Lebanese power plants due to its high sulfur content, Beirut purchases another type of compatible fuel from other suppliers, who receive the Iraqi fuel in exchange.
This contract, which has been renewed for a third consecutive year, will enable the Deir Ammar and Zahrani power plants to operate at nearly 80% of their capacity, enabling Electricité du Liban (EDL) to produce over 800 megawatts of electricity.
