Israeli companies in northern Israel have avoided signing contracts with Eastern Mediterranean Gas (EMG) for the delivery of natural gas, because of uncertainty about when the national natural gas pipeline will reach the Haifa Bay area.
EMG shareholder Joseph (Yossi) Maiman yesterday asked acting Minister of Finance and Minister of Industry, Trade and Labor Ehud Olmert and Minister of National Infrastructures Benjamin Ben-Eliezer to expedite construction of the pipeline.
Maiman said many companies in the Haifa Bay area already want to sign purchase contracts for natural gas, but cannot do so because they do not know when the pipeline will be operational. He added that a variety of companies have expressed an interest in converting facilities from crude oil or diesel to natural gas.
Maiman said EMG would deliver 1.7 billion cubic meters of natural gas to Israel Electric Corporation (IEC) in 2007, and would be able to meet all natural gas demand. “The only obstacle in our way will be the ability of Israel Natural Gas Lines Company Ltd. to bring Egyptian natural gas from the distribution point in Ashkelon to Israeli consumers,” he said.
In 2007, two natural gas suppliers will operate in Israel: Yam Thetis, which is already operating, and EMG. Unless the natural gas pipeline is operational throughout the country, EMG will not be able to supply gas to all those who want it.
Two routes are under consideration for the pipeline: an undersea route from Ashdod via the Reading terminal in Tel Aviv, Hadera, Hof Dor and the Hagit power station; and an overland route from Ashkelon to Ashdod, via Kiryat Gat, the Soreq Junction, and to Gezer. The northern route is undergoing statutory procedures, but has encountered major problems, and the pipeline will not be ready when EMG enters the market.
Oil Refineries Ltd. chairman Ohad Marani has said that the pipeline project to Haifa should be declared a national project. He said construction of a natural gas pipeline system in Haifa Bay would save NIS 600 million in energy costs a year.
Published by Globes [online], Israel business news - www.globes.co.il - on September 15, 2005