Turkey, Israel Plan MOU For Multiple Pipeline MedStream Project
Following several years of discussion, Turkey and Israel are expected to sign a memorandum of understanding (MOU) in February providing for a feasibility study on the construction of a multiple sub-sea pipeline project that would ship crude oil, gas, water and electricity from Ceyhan to Israel. A fifth pipeline would be allocated for fiber optic cables. The feasibility study for the project, named MedStream, could take up to two years to complete, according to Amit Mor, CEO of Israeli energy consultancy firm Eco Energy. The EU is expected to finance the feasibility study, which could cost $20mn. The project, estimated to cost several billion dollars, would run nearly 500km along the seabed of the eastern Mediterranean Sea reaching depths of 1,800ms. The proposed crude oil pipeline would be designed to carry 20-50mn tons/year of Azerbaijani crude transported to Ceyhan via the Baku-Tbilisi-Ceyhan (BTC) pipeline, although it will be left to the study to determine whether it is more economically viable to ship crude by tanker from Ceyhan to Haifa. The natural gas pipeline would either carry supplies originating at Azerbaijan’s Caspian offshore Shah Deniz gasfield or Russian gas via an extension of the Blue Stream pipeline. Its capacity is estimated at 4-10 bcm/year. Talks on gas deliveries via the MedStream artery are taking place with Gazprom and Azerbaijan.
Dr Mor said the scope of the project was so large and the obstacles to be overcome so huge that it could be late in the next decade before the project materialized. But he emphasized the importance of the project by stressing Israel’s need to diversify its natural gas and electricity supplies. He told MEES that diversity of supply had become more urgent for Israel in view of the fact that talks between BG and Israel over gas supplies from the offshore Gaza Marine field had broken down (see page 6). Dr Mor said the cost of constructing the gas pipeline component of MedStream alone could prove to be very costly and urged the Israeli government to consider an energy project that would include receiving shipments of LNG.
Copyright MEES 2008.
