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Transport and storage

Legal framework

What is the general legal framework governing the transportation and storage of oil and gas resources in your jurisdiction?

There are currently no distribution or transportation by pipelines in Lebanon. However, the infrastructure of most power plants is equipped to receive natural gas for electricity production.

Transportation and storage facilities or systems must meet Lebanese and international requirements for the protection of public safety, the environment and personnel working on or near the system.

Transportation

How is cross-border transportation of oil and gas resources regulated?

Agreements on the joint production, transportation, utilisation and cessation of petroleum activities must be submitted to the minister of energy and water and are subject to approval by the Council of Ministers.

Are there specific provisions governing marine and ground transportation of oil and gas resources?

There are no specific provisions in place yet.  

Construction and infrastructure

How are the construction and operation of pipelines, storage facilities and related infrastructure regulated?

The regulatory requirements established for the oil and gas sector in Lebanon allow for the construction and operation of oil and gas pipelines. If an approved plan for development and production contains plans for the construction, placement and operation of transportation or storage facilities, the Council of Ministers must award the rights holder a licence for this purpose. If the approved plan does not contain such plans, the rights holders can submit a separate plan for the construction, placement and operation of a transportation or storage facility to the minister of energy and water (with a copy sent to the Lebanese Petroleum Administration); the Council of Ministers can then award a specific petroleum licence for these purposes.

The conditions for awarding such a licence are set by the Council of Ministers based on the opinion of the Lebanese Petroleum Administration.

Oil and gas pipelines must be constructed in accordance with best petroleum industry practices and best pipeline practices. The routes of pipelines, cables or sites, and other facilities or equipment comprising a transportation system to be used for petroleum activities must be surveyed before construction, installation or placement.

A foreign legal person other than a rights holder wishing to construct, maintain or operate a sub-marine cable or pipeline related to petroleum activities in maritime areas under Lebanese jurisdiction is subject to the Offshore Petroleum Resources Law – to the extent that this does not contradict international law.

What rules govern third-party access to pipelines and related infrastructure?

The minister of energy and water can allow third parties to use a facility’s spare capacity for the production, transportation or storage of petroleum.

Third-party use of spare capacity may be granted only when it does not materially negatively affect the petroleum activities of the rights holder which owns or has use of the facilities in question. Third-party use of spare capacity shall be permitted only when it is feasible from a technical, environmental and safety point of view, and provided that:

  • there is available capacity in the facility or system; and
  • there are no insuperable technical problems which exclude the proper use of the facility or system of facilities to satisfy third-party requests.

Terms and conditions for the use of a facility or system, preservation or increase of capacity, and transportation or storage of third-party petroleum shall be negotiated on the basis of the applicable regulatory requirements and reasonable commercial terms. Negotiations shall be conducted in good faith.

If the parties cannot reach an agreement with regard to the commercial and operational terms for the use of a facility or a system of facilities for the purpose of petroleum activities, the matter can be settled by an independent commission of three experts selected by the Lebanese Petroleum Administration in accordance with the procedure included in the relevant exploration and production agreement.

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