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Monday, 26 November 2018

Israel to supply natural gas to Greece, Italy and Cyprus

Israel wants to build a USD 7-8 bn pipeline to supply natural gas to Europe: Israel has signed agreements with Greece, Italy and Cyprus to supply them with natural gas through a USD 7-8 bn 2,000 km pipeline that will take some five years to build, Israeli TV news channel Hadashot reported late on Saturday, according to i24NEWS, Globes and the Times of Israel. The European Union has already provided USD 100 mn to fund a feasibility on the pipeline, which is expected to be the world’s longest and deepest, the news channel reported. Energy Minister Yuval Steinitz was quoted as saying, “For decades, we have complained about the Arab influence in Europe due to oil and gas. The export of gas to Europe will moderate this influence to a certain extent and be a counterweight to Arab power.” Israel recently signed agreements with neighboring Egypt and Jordan to supply them with natural gas for both domestic consumption and, in Egypt’s case, onward export to Europe through LNG trains.

Ready by 2025? Israel signed a MoU with the three European countries back in December 2017 and has since been in discussion with them about details of the project, Globe noted. The EU is expected to approve the agreement later this week and a final contract should be signed in February 2019 while financing for the project is expected to take a year before construction kicks off — which would mean the pipeline could be ready by 2025, Globe noted.

The first real challenge to Egypt’s role as regional energy hub — or Israeli pipe dream? Israel has been doggedly lobbying for the pipeline for years — in fact, Tel Aviv saw Egypt as a viable gas export hub only because of the technical and financial difficulty in building a 2,000 km underwater pipeline. Michael Leigh, former director-general of the European Commission, is not convinced of the project’s viability. “It’s not feasible for commercial and political reasons … it’s pie in the sky,” he said back in 2016. The pipeline will need Turkey on board, which might be challenging given the maritime border dispute it has with Cyprus.

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