New gas pipeline believed by Israelis to be negotiations ploy
Egypt’s plan to build a undersea gas pipeline to from El-Arish to Tripoli in Lebanon is being seen in Israel as an attempt by the Egyptian authorities to provide themselves with more leverage in their negotiation with Israel over the long-term supply of natural gas.
According to Lebanese Energy Minister Mohamed Abdel Hamid Beydoun, Lebanon will import 12 million cubic meters of gas a day from 2002 to 2005, of which 9 million cubic meters will be supplied by Egypt and the remainder by Syria.
Consequently, on an annual basis, Lebanon will receive 3.25 billion cubic meters of natural gas a year from Egypt.
Earlier this year, Egypt had said it was prepared to commit to up to 7 billion cubic meters a year to Israel, which is currently preparing to shift a major portion of its national electricity grid to gas-powered turbines, and to construct a national gas grid.
To manage the latter project, the Israeli government plans to authorize a company to develop the grid—and an estimated cost of $200 million—which will be capable of transporting 2 billion cubic meters of gas per annum.
The Egyptians and the Israelis have been negotiating about natural gas supply since the early 1990s, but the talks ground to a halt in 1996, in part because of the strained relationships that developed between Egypt and government of the then-prime minister, Benjamin Netanyahu.
They were renewed in late 1999, and on December 22, 1999, Israeli Prime Minister Ehud Barak announced that Egypt has agreed in principle to sell natural gas, via a pipeline that would from El-Arish to Israel and Palestine, and later to Turkey.
But, when the announcement was made in 1999, other developments had taken place off the Israeli coast. Several months earlier, natural gas deposits were discovered in two wells adjacent to the city of Ashkelon. Then in February, a third well in the area indicated the presence of even larger quantities of natural gas.
Pressure began building in Israel that the new grid be fueled only by locally acquired gas. Speaking to the Globes financial daily, Dr. Yehezkel Druckman, the petroleum commissioner at the ministry of infrastructure, said that Israel would not need any Egyptian gas for another 10 to 15 years.
But the Israel Electric Corporation, which would be the main client for natural gas, was not convinced. “We definitely think that the dependence on a single party establishes a risk factor to Israel’s electricity grid,” he said, in conversation with TradeLine, a bimonthly magazine published by the Federation of Israeli Chamber of Commerce.
Speaking to Jerusalem Post, a spokesperson for Merhav, the Israeli investment company that is one of the owners of the East Mediterranean Gas Pipeline (EMG), said it will continue with its existing plans of setting up a pipeline for the supply of natural gas from Egypt to Israel and Turkey.
EMG is jointly owned with Egyptian national gas company EGPC, and Egyptian businessman Hussein Salem.
The memorandum of understanding for the construction of the $1 billion pipeline was signed on Friday by the energy ministers of Lebanon, Egypt and Syria.
One part involves a 400-km sea pipeline carrying Egyptian gas from El-Arish on the northwestern coast of Egypt’s Sinai Peninsula to Lebanon.
The second part involves construction and operation of a 400-km land pipeline that will carry both Egyptian and Syrian gas. The sea pipeline is expected to cost $800 million and the land-based line $200 million.
Jordan is also a factor in the newly announced agreement, and is scheduled to become a in a company called Arabian Gas, which will to distribute gas in Lebanon, Syria and Jordan, using the $200 million land based section of the pipeline. – (Albawaba-MEBG)
© 2001 Mena Report (www.menareport.com)
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