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Agreement slammed by environmental group

Israeli firm signs deal to pipe UAE oil to Europe

State-owned Europe-Asia Pipeline Co. says agreement, reached as part of normalization pact, will see much more oil pumped through major link between East Asia and Europe

An Eilat Ashkelon Pipeline Company oil terminal in Eilat. (CC BY 2.5/Pikiwikisrael)
An Eilat Ashkelon Pipeline Company oil terminal in Eilat. (CC BY 2.5/Pikiwikisrael)

An oil pipeline running from the Red Sea resort of Eilat to the Mediterranean port city of Ashkelon will be extended to the United Arab Emirates, providing the UAE with a bridge to get fossil fuel directly to Europe, an Israeli company said Tuesday. It is seen as one of the most significant collaborations to have emerged since the countries established diplomatic ties.

The memorandum of understanding is between the state-owned Europe-Asia Pipeline Co., formerly the Eilat-Ashkelon Pipeline Co., and a company called MED-RED Land Bridge, which is a joint venture between Israelis and Emiratis, according to an announcement.

It was signed in Abu Dhabi with US Treasury Secretary Steve Mnuchin and other US and UAE officials present, meaning the signing would have taken place shortly before they flew to Israel Tuesday for a landmark visit.

EAPC said in a statement that the collaboration is significant news for the global energy market, since it will offer oil producers and refiners the shortest, most efficient and most cost-effective route to transport oil and related products from the Arabian Gulf to the consumption centers in the West, and provides access for consumers in the Far East to oil produced in the Mediterranean and Black Sea regions.

“MED-RED is in advanced negotiations with major players in the West and in the East for long-term service agreements,” the company said.

The agreement “is likely to increase the transferred quantities by tens of millions of tons per year,” it added.

The deal is worth $700 million to $800 million over several years, according to the Reuters news agency, which cited an unnamed official with knowledge of the details.

The report said supplies could begin in early 2021.

“There is no doubt that this agreement is of high importance to the Israeli market, both economically and strategically, with joint investments extending a decade into the future,” EAPC Chairman Erez Halfon said.

MED-RED is jointly owned by Petromal, part of the Abu Dhabi-based National Holding, Israeli company AF Entrepreneurship, and international infrastructure and energy company Lubber Line.

EAPC was originally formed in 1968 to ferry Iranian oil to Israel. It has continued to operate since that spigot was shut due to the Islamic Revolution, and in 2014 was responsible for the worst oil spill in the nation’s history.

View of the oil leak from a pipe of the Eilat Ashkelon Pipeline Company in the Arava area of South Israel, which caused Israel’s biggest environmental disaster, on December 9, 2014. (Marc Israel Sellem/Jerusalem Post/POOL)

However, the deal was slammed by Maya Jacobs, CEO of the Zalul Environmental Association, as “mortal danger to the Gulf of Eilat, the coral reef and the city’s tourism sector.”

“The rapid signing of the deal, without the involvement of the Environmental Protection Ministry, without professional opinions and without examining the risks, is proof of the urgent need to disband EAPC, which is exempt from environment and transparency laws for purely financial reasons,” Jacobs said in a statement.

“The pursuit of Gulf oil will lead us to a certain disaster,” she added, calling for pursuing clean, renewable energy rather than “yesterday’s energy sources and money tainted by environmental and health catastrophes.”

As a senior Emirati delegation made a landmark visit Tuesday to the Jewish state, Israel’s Foreign Ministry said the UAE expressed its wish to facilitate the reciprocal opening of embassies in Tel Aviv and Abu Dhabi “as soon as possible.”

Israel has handed the UAE a letter expressing the hope to open an embassy soon in Abu Dhabi on September 25, ten days after the two countries signed the Abraham Accords in Washington.

The UAE delegation signed four bilateral agreements with Israel on Tuesday, including a visa waiver agreement.

During a welcoming ceremony for the UAE officials at Ben Gurion Airport, the United States, Israel and the UAE also announced the creation of a trilateral fund seeking to foster regional cooperation and prosperity. The $3 billion Abraham Fund will be based in Jerusalem.

The visa exemption treaty, which was signed and needs to be ratified by both countries before coming into force, is Israel’s first such agreement with an Arab country.

On Monday, Etihad Airways Flight EY9607 — lauded as the first commercial shuttle from the UAE to Israel — landed at Ben-Gurion. That flight came a day after the two nations agreed to enable 28 weekly direct flights between their territories. The flight arrived without passengers but later ferried an Israeli travel and tourism delegation to Abu Dhabi.

On Thursday, the Knesset approved Israel’s normalization deal with the UAE by an overwhelming majority, all but ensuring that it will be ratified in the near future.

Raphael Ahren contributed to this report.

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