Talks progress on gas pipeline to Greece

A pipeline from Leviathan would be a technically complex project that could cost over $6 billion.

Sources inform ''Globes'' that Israel and Greece have made real progress toward a memorandum of understanding on an agreement to export natural gas from the Leviathan field via Greece. The parties also agreed to make a joint approach to the EU to sponsor a future agreement between Israel and Greece.

The negotiations follow a meeting in August 2010 between Prime Minister Benjamin Netanyahu and Greek Prime Minister George Papandreou, when Netanyahu proposed that Israel should supply natural gas to Greece. It was not yet known at the time whether any gas existed at Leviathan, but in December, Leviathan's partners announced the discovery of 16 trillion cubic feet of gas. Leviathan is located 130 kilometers west of Israel.

Following the Netanyahu-Papandreou meeting, several secret meetings were held between the countries to promote the initiative. Netanyahu also discussed natural gas exports with Cypriot President Dimitris Christofias last month in Jerusalem.

In the last meeting between the Israeli and Greek teams last Thursday, it was proposed to conduct a feasibility study on the idea of laying a gas pipeline from the Leviathan field to the Greek coast. This pipeline is the main solution under discussion for exporting gas from Israel to southern Europe, but it is a very technically complex undertaking that would cost $6 billion or more. An alternative is to lay a pipeline to a liquefied natural gas (LNG) facility in Cyprus or Israel.

Greece is very interested in Israeli gas in order to diversify its energy sources. Greece currently buys about 70% of its natural gas from Russia, and the rest from Algeria and Qatar, via an LNG facility.

A few months ago, Greek Deputy Minister for Energy, Environment and Climate Change Ioannis Maniatis told "Globes", "Use of natural gas in Greece is half the European average, and we want to close the gap." Greece currently consumes 3.75 billion cubic meters of gas a year, compared with 5.2 billion cubic meters by Israel, and it is expected to increase consumption to 9.3 billion cubic meters by 2020.

Published by Globes [online], Israel business news - - on April 12, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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