Lebanon says it will honor Sonatrach fuel import contract amid probe

The logo of the state energy company Sonatrach is pictured at the headquarters in Algiers, Algeria November 20, 2019. (Reuters)

Lebanon will honor a fuel import contract with Algerian state energy firm Sonatrach until the end of the year, the government said on Tuesday, as a judicial probe continues over tainted fuel shipped to the country.

Sonatrach, which supplies Lebanon with fuel under a 2005 contract, has denied any involvement in shipping tainted fuel. The Algerian presidency described the case last week as a “Lebanese-Lebanese issue” in which Algeria was not involved.

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Lebanese Energy Minister Raymond Ghajar said a new tender would be held when the contract ends at the end of 2020. Speaking after a cabinet meeting, he said “non-compliant” fuel had arrived in Lebanon twice.

The fuel is used to power electricity plants run by a state-owned company that has long bled public funds.

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Judge Ghada Aoun, the investigating prosecutor, has pressed charges against officials including the electricity company chairman and the oil installations director. She ordered the arrest of 17 people last month.

The state-run National News Agency has described the investigation as a probe into fraud, bribery, money laundering and manipulation.

The Algerian president has also ordered an investigation.

Sonatrach Petroleum Corporation (SPC), a London-based subsidiary in charge of the company’s operations abroad, said in a statement issued on April 26 that it was in contact with Lebanon to resolve the situation as soon as possible.

It also refuted what it described as untrue allegations about the involvement of a senior Sonatrach official, saying that one of the people questioned in Lebanon was an independent maritime agent working for Sonatrach.

Lebanon informed Sonatrach about the bad quality of a fuel cargo shipment in March, SPC said in the April 26 statement.

An energy industry source in Algeria said tests showed the fuel met standards before shipment but authorities ordered more tests upon arrival in Lebanon. SPC obtains cargoes from international trading companies before shipments go to Lebanon.

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