Shalom should look closer to home for Leviathan gas

By Leigh Elston 11 December 2014
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Talks to pipe Leviathan gas to the Idku LNG plant are progressing well. (BG Group) Talks to pipe Leviathan gas to the Idku LNG plant are progressing well. (BG Group)

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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