Israel, the Greek Cypriot administration, Greece and Italy have reached an agreement to lay an undersea gas pipeline from Israel to Italy, Israeli business daily Globes reported on Sunday.
According to the report, the countries signed an agreement for the $7 billion pipeline with the backing of the EU, after a Memorandum of Understanding was signed in December 2017.
The report said that the agreement would be brought before the EU for approval next week, with the possibility of receiving the go-ahead in February 2019. According to estimates, financing the pipeline project will take one year while pipelaying is anticipated to take five years if all goes well.
However, the project requires very complex engineering and very strong financial support. The pipeline needs to cover a length of 2,100 kilometers and lay at a depth of 3.5 kilometers.
Currently, Israeli gas reserves do not have sufficient volumes to warrant the pipeline at a time when global natural gas prices are too low to guarantee an adequate return on its investment. Therefore, the project's continuance has been questioned and experts have drawn criticism on its economic viability.
However, Israeli Energy Minister Yuval Steinitz commented that the deal would wean Europe off dependency on Middle Eastern resources.
“For decades, we have complained about the Arab influence in Europe due to oil and gas. The export of gas to Europe will moderate this influence to a certain extent and be a counterweight to Arab power,” Steinitz said.
Neighboring Egypt is also looking to link the potential pipeline and export its newly discovered natural gas resources from its giant offshore Zohr field.
Egypt has recently signed several deals with Israel, the Greek Cypriot administration and Greece as well for the development of East Mediterranean offshore fields.
By Muhsin Baris Tiryakioglu