(November 27, 2018 / The Tower) Israel, Cyprus, Greece and Italy have reached an agreement on the world’s longest underwater gas pipeline, estimated to cost nearly $7 billion, the financial website Globes reported on Sunday.
After signing a memorandum of understanding late last year, the four countries have negotiated the details of the deal. It is expected that the deal, which calls for the laying of the pipeline with the capacity of 10 to 20 billion cubic meters of gas and will traverse 2,100 kilometers (1,300 miles), will be signed in February of next year.
The European Union, which backs the deal, has spent $100 million performing feasibility studies, which have produced positive results.
According to current estimates, it will take about a year to arrange the financing for the pipeline and five years to place it. If all goes according to plan, the pipeline could be operational as soon as 2025.
Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz originally proposed the pipeline two years ago in Abu Dhabi. The project is expected to cost NIS 25 billion ($6.7 billion) and be financed by private enterprise. Investors are expected to recoup their outlays by charging for the conveyance of the gas through the pipeline.
Although priority will be given for the export of gas from Israel and Cyprus through the pipeline to Europe, other countries will be allowed to access the pipeline if they reach an agreement with the four partners.
While questions had been raised about the economics of the pipeline, the rising price of gas in Europe has quieted some of the criticism.
“The agreement that we have drawn up will enable Israel to become an energy supplier to Europe, and that has both economic and political importance. This will be the first time ever that Israel has joined with the E.U. on any major infrastructure project,” said Steinitz.
The discovery of natural gas fields in Israeli coastal waters and plans to sell the resource to Europe have drawn Israel, Greece and Cyprus closer together diplomatically.
In May, leaders of the three nations held their fourth trilateral summit over the past two-and-a-half years.