US alleviates Lebanon's sanctions concerns over energy deal

Lebanon says the United States has provided further assurances that a regional energy deal involving Syria won’t run afoul of US sanctions, the Lebanese prime minister’s office said on Friday. 

A US-endorsed deal would transport Egyptian natural gas to energy-starved Lebanon using the Arab Gas Pipeline, an existing transnational pipeline extending from Egypt to Lebanon through Jordan and Syria. For its participation in the World Bank-financed project, the Syrian government is expected to receive in-kind compensation instead of cash payments. 

Questions remain over whether the energy project would contradict US sanctions on the Syrian government and its benefactors. The Caesar Act allows the United States to sanction third parties who do business with the Syrian government, specifically in the construction, engineering, aviation and energy sectors. In October, senior State Department official Victoria Nuland said that because the deal “falls under the humanitarian category, no sanctions waiver would be required.” 

But last month, Egyptian Minister of Petroleum and Mineral Resources Tarek El Molla told Al-Monitor that Cairo was still seeking assurances from Washington that its involvement in the energy deal wouldn’t violate sanctions. 

During a meeting in Beirut on Friday, US Ambassador to Lebanon Dorothy Shea told Lebanese Prime Minister Najib Mikati that there are no concerns regarding potential sanctions, his office said.  

Shea handed Mikati a US Treasury Department letter “to answer some of the concerns the Lebanese authorities had regarding regional energy agreements that the United States helped facilitate between Lebanon, Jordan and Egypt," according to a statement from Mikati’s office.  

In a statement posted to the US Embassy’s website, Shea confirmed she delivered a letter that addressed some concerns held by Lebanese authorities. She added that the Treasury letter “represents forward momentum, an important milestone as we continue to make progress to bring safer, cleaner, more reliable and more sustainable energy solutions to help address the energy crisis.”

Power outages caused by a shortage of fuel are deepening Lebanon’s economic and humanitarian crisis. The Lebanese currency has lost around 90% of its value since 2019, plunging millions into poverty.