At a conference of energy ministers from European and Middle Eastern countries in Rome last week, Israel Minister of National Infrastructure, Energy, and Water Silvan Shalom suggested to Vice-President for Energy Union Maros Sefcovic European support for building a natural gas pipeline from Israel to Europe. Shalom asserted that such a pipeline would be useful to both sides. Shalom will fly to Brussels in three weeks to meet with representatives of the relevant countries and to discuss further details.
The conference, also attended by energy ministers from Lebanon, Jordan, Egypt, and Turkey, discussed, among other things, Europe's need to diversify its sources of natural gas. As of now, Russia supplies 30% of the gas consumed by Europe, which fears further disruptions in the continuous flow of gas, given the dispute between Russia and Ukraine. The pipeline used to supply gas to Europe also passes through Ukraine. When Russia decides to halt the supply of gas to Ukraine, Europe also suffers.
Shalom therefore revived a proposal, made long ago, to construct a gas pipeline beginning in Israel, passing through Cyprus, and ending in Italy. From there, the gas can also reach the other European countries. Shalom claimed that this gas could be an additional source for Europe, and at a lower price.
Such a pipeline would help Israel, and other gas developers to export some of their gas reserves, currently estimated at 1,000 BCM. The main difficulty in such a pipeline is technical - it would be 1,250 kilometers long and pass through waters with a depth of up to 3,000 meters. This pipeline, which could transport 10 BCM annually, would be the world's longest, and is expected to cost over $15 billion.
Shalom's proposal comes a few weeks after the EU announced that it would contribute €1.32 million to an electrical cable between Israel and Cyprus. The cable is part of the Connecting Europe Facility (CEF) plan, which will facilitate transmission of electricity in either direction. Its capacity will be 2,000 megawatts at a distance of 1,518 kilometers: 329 kilometers from Israel to Cyprus, 879 kilometers from Cyprus to Crete, and 1,310 kilometers from Crete to Athens.
In the past, the Ministry of Energy estimated the cost of the entire project at €1.5 billion, with the segment between Israel and Cyprus costing €500 million. The ministry also said that the return on the entire Israel-Cyprus-Crete project would be €17.5 billion, and that the project would make back the investment on it in less than four years.
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2014
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