After two years of intensive discussions, Israel, Cyprus, Greece and Italy, with the backing of the EU, have reached an agreement on laying the world's longest underwater pipeline for the export of gas from the Eastern Mediterranean to Europe.
Israel, Cyprus, Greece and Italy first signed a Memorandum of Understanding on the matter in December 2017.Over the past year, the countries have hammered out details about the pipeline, which will be brought for approval by the EU later this week. The agreement should be signed in February 2019. Estimates are that it will take one year to arrange the financing for the project and five years to lay the pipeline, so that if all goes according to plan, the pipeline could be in place by 2025.
The project, which will cost an estimated NIS 25 billion, was initiated by Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz, who first presented it at a conference in Abu Dhabi two years ago. The project entails the most complex engineering with the pipeline laid at a depth of 3-3.5 kilometers beneath the sea over a distance of 2,100 kilometers. The EU has spent $100 million to date in feasibility tests and so far, according to the Ministry of National Infrastructures, Energy and Water Resources, the results have been positive.
Under the terms of the agreement, exports of gas to the European market from Israel and Cyprus will be given preferential status. Other countries can be allowed to link up to the pipeline with the agreement of the founding countries.
The pipeline, which will have a capacity of 10-20 billion cubic meters of gas, will be laid from Israel's economic water to Cypriot waters and across Cyprus and via sea onto Greece, Crete and Italy.
The plan has been controversial among many who claim it is not economically worthwhile. However, the recent sharp rise in gas prices in Europe has tempered some of this criticism.
The pipeline would be paid for by the private sector, which would earn back its money plus handsome profits by charging conveyance fees.
Steinitz said, "The agreement that we have drawn up will enable Israel to become an energy supplier to Europe, and that has both economic and political importance. This will be the first time ever that Israel has joined with the EU on any major infrastructure project."
Published by Globes, Israel business news - en.globes.co.il - on November 25, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018