Ministers of the three countries met in Jerusalem today and agreed to push for a pipeline to Europe, which wants to reduce dependence on Russian gas.

At a meeting today in Jerusalem, government ministers from Israel, Greece, and Cyprus today agreed to continue their promotion of a natural gas pipeline from Israel to Europe. Senior ministry officials also attended the meeting, including Israel Ministry of National Infrastructure, Energy, and Water Resources director general Shaul Meridor. Israel Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz and colleagues Greek Minister of Economy, Development, and Tourism Giorgos Stathakis and Cypriot Minister of Energy, Commerce, Industry, and Tourism Georgios Lakkotrypis agreed to hold a joint meeting on the subject with European Union Climate Action and Energy Commissioner Miguel Arais Canete.

The current working assumption is that the cost of a pipeline to northwestern Greece and from there to Italy and Bulgaria will be $5.7 billion, and will be economically worthwhile at prices of $7-9 per BTU. Energy sources believe that this estimate of the cost is at least $2 billion lower than the true cost, and that this per BTU price is likely to be non-competitive within a few years, and certainly at a time when Russia is selling 175 BCM a year to Europe, amounting to 43% of all the gas consumed there in 2015, at an average price of $4.40 per BTU.

On the other hand, the European Energy Commission today announced that it would consider Europe’s 124 bilateral energy contracts in order to create a unified regulated market that could reduce Europe’s great dependence on Russian gas. Another important point is that the greater the quantities of gas transported through the proposed pipeline, the more economically worthwhile it will be. If additional gas fields are discovered in Israel, and if a corresponding measure currently being promoted by Lakkotrypis succeeds, the pipeline will become more worthwhile.

At the end of today’s meeting, Steinitz said, “Additional natural gas discoveries in opening the Israeli and Cypriot waters to oil and gas exploration are making our region attractive, and a common gas pipeline is one of the strategic channels for exporting to Europe. As part of a series of trilateral meetings, this meeting is bolstering cooperation between the countries, and I was glad to see our common desire to move this project forward as part of closer relations between the countries.”

Published by Globes [online], Israel business news – – on December 8, 2016