Shalom should look closer to home for Leviathan gas11 December 2014
If the Leviathan partners secure binding gas sales agreements with BG Group in Egypt, or with Jordan’s state-owned National Electric Power Co. (NEPCO), it would not only be a commercial boon for the developers, but a major political coup for Israel. Yet, rather than focus on clinching these deals, Israeli Energy Minister Silvan Shalom has thrown his weight behind a pipeline to ship Leviathan gas to Europe that few believe makes commercial sense.
Shalom and the Greek and Cypriot energy ministers are lobbying the EU to fund a feasibility study into a pipeline to run from Israel to Italy, via Cyprus and Greece.
The 1,250 km subsea pipeline is estimated to cost around $10 billion, making it as expensive as an LNG plant but without the destination flexibility. From a strategic perspective, its size would limit its importance in reducing Europe’s dependence on Russian gas. Water depths of 3,000 metres and difficult terrain would likely limit its capacity to around 8-10 billion cubic metres per year, Charles Ellinas, an independent energy consultant, told Interfax.
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