Exporting oil to Europe via an Israeli land pipeline would help the Gulf states bypass the dangerous and costly Straits of Hormuz and Suez Canal shipping routes.
Israel will propose that the UAE help promote the construction of a land pipeline between Saudi Arabia and Israel for oil and distillates for shipping from the Mediterranean coast onto Europe and North America using the existing infrastructure of the Eilat Ashkelon Pipeline Co. Ltd. (EAPC). Such a plan would financially benefit Israel and be cheaper and safer for the Gulf states by bypassing dangerous sea routes and the costly Suez Canal.
Sources inform “Globes” that there have been high level meetings on the matter in recent days involving between senior figures in the Ministries of Defense and Foreign Affairs involving EAPC chairman Erez Kalfon and CEO Itzik Levy.
The peace agreement signed yesterday between Israel and the UAE hints at such a project with energy emphasized as one of the areas for cooperation.
Earlier this year EAPC changed the meaning of its acronym to Europe Asia Pipeline Co.
The EAPC plan would involve extending the Ashkelon – Eilat pipeline 700 kilometers southeast to the Yanbu oil refineries in Saudi Arabia. Such a pipeline could go overland or under water in the Red Sea, although there could be objections to both plans from environmentalists.
The commercial advantages of such a plan for Europe is that it would shorten the time and cost of shipping oil and distillates from the Gulf to the West via the Suez Canal. Israel could earn an estimated several hundred million dollars per year by allowing the oil to flow through the pipeline from Eilat to the Mediterranean coast.
For Saudi Arabia and the Gulf state it would reduce dependence on the perilous sea routes around the Straits of Hormuz and Yemen would are vulnerable to attacks from Iran and then pirates nearly the entrance to the Red Sea. Most Gulf oil exports go eastwards to India, China, Japan and the rest of Asia but exports to Europe and America are still very significant.
An article in S&P Global Platts several weeks ago focused on the possibility of such a plan.
In the Platts article, EAPC deputy manager commerce and marketing Effie Milutin said, “The geopolitical risks in the Persian Gulf region only increase the attractiveness of the EAPC system. Incidents around the Strait of Hormuz – which transports around 20% of all global oil supply – have increased the oil and shipping industry’s concerns over security of supply, with shipments via the Red Sea’s Bab el-Mandab commodity chokepoint seen as an alternative route.”
en.globes.co.il – on September 16, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020
Content retrieved from: https://en.globes.co.il/en/article-israel-to-propose-saudi-israel-oil-pipeline-1001343034.
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