EXCLUSIVE-Qatar to supply gas to Syria via Jordan with a US nod, sources say

By Timour Azhari and Andrew Mills

BEIRUT, March 13 (Reuters) - Qatar is set to supply Syria with gas via Jordan to improve the nation's meager electricity supply and boost Syria's new rulers, according to three people familiar with the matter, in a move that a U.S. official said had Washington's approval.

It would be the most significant tangible support for the new administration in Damascus by Qatar, one of the region's sternest opponents of the now-deposed Bashar al-Assad and strongest backers of the rebels-turned rulers who replaced him.

A U.S. official said the gas deal had a nod of approval from President Donald Trump's administration without saying how this was communicated.

Syrian state media later quoted the Qatari Charge d'affaires in Syria Khalifa Abdullah Al Sharif announcing an initiative "to provide an approved supply of natural gas to Syria through Jordanian territory for a specific period".

Two Jordanian officials said they were not aware of Qatari gas arriving by vessel in the next days. Another official said gas could be supplied, financed by Qatar.

The U.S. green light and efforts to encourage a deal between Kurdish forces in Syria's north and Damascus suggest the U.S. remains actively engaged in Syria, despite Washington moving more cautiously than European states to ease sanctions.

The gas would be transferred from Jordan via a pipeline to the Deir Ali power plant in southern Syria, where it could boost power supply by up to 400 megawatts, two of the sources said. Sharif also said the plan aimed to increase power production by an initial 400 MW.

Estimates of Syria's recent power capacity range up to around 4,000 MW.

The U.S. State Department and Qatar's foreign ministry did not respond to an emailed request for comment.

JORDAN POWER SUPPLY

Syria suffers from severe power shortages, with state-supplied electricity available just two or three hours a day in most areas. Damage to the electricity grid means that generating or supplying more power is only part of the problem.

Damascus used to receive the bulk of its oil for power generation from Iran, but supplies have been cut off since Islamist Hayat Tahrir al-Sham led the ouster of Tehran-allied former president Assad in December.

The interim government has pledged to quickly ramp up power supply, partly by importing electricity from Jordan and using floating power barges that have yet to arrive.

According to two further sources with knowledge of the matter, Jordan has received U.S. approval to move forward with the supply of up to 250 MW of electricity during non-peak hours.

However, Syria still needs to make fixes to its electricity grid and solve other technical issues before the supply, expected at around 250 megawatts during non-peak hours, can begin, the sources said.

"The internal network in Syria is not yet ready to receive this and needs a significant amount of work. Additionally, some matters are still unclear about financing of the agreement," said Ibrahim Seif, a former Jordanian minister of energy and mineral resources.

U.S. and Jordanian officials did not respond to requests for comment on the plan.

WAIVER UNCERTAINTY

A Western diplomat briefed on the Qatari gas plan said it came as part of an effort by Doha to follow up political backing from Gulf Arab states including Saudi Arabia and Qatar with tangible help to support Syria's new rulers.

"They are very keen to finally give something, even if it won't make a huge difference," the diplomat said.

Gulf backing has largely not been matched by official, tangible assistance due to U.S. sanctions on Syria, despite a waiver issued in January that allowed for some transactions, including on energy.

But the exemption did not remove any sanctions, and states and entities looking to engage with Syria have sought additional guarantees.

Reuters reported last month that Qatar was holding off providing Syria's new rulers with funds to increase public sector pay due to uncertainty over whether the transfers would breach U.S. sanctions.