Ministry blocks UAE pipeline deal over worries of leaks near Eilat

State-owned Europe Asia Pipeline Company reportedly plans to fight decision after Environmental Protection Ministry refuses permits needed to ramp-up use of Red Sea terminal

Men row on standup paddle boards in the Red Sea waters near the Eilat-Ashkelon Pipeline Company's oil terminal by Israel's southern port city of Eilat, on February 9, 2021. (Menahem Kahana/AFP)
Men row on standup paddle boards in the Red Sea waters near the Eilat-Ashkelon Pipeline Company's oil terminal by Israel's southern port city of Eilat, on February 9, 2021. (Menahem Kahana/AFP)

The Environmental Protection Ministry has notified a state-owned pipeline company on Wednesday that it would not grant permits for a plan to use an Israeli overland route to funnel Gulf crude oil to Europe, citing concerns over possible leaks.

The decision, announced on Wednesday, all but scuttles a lucrative 10-year contract signed in December between officials in Israel and the United Arab Emirates, which would have significantly increased the amount of oil being pumped through terminals in Eilat and Ashkelon.

The plan had been criticized by activists and others, who noted that the aging pipeline was already responsible for the country’s worst environmental spill ever, and feared another incident could devastate the rich array of Red Sea corals off Eilat’s coast while also harming tourism to the city. The proposal was frozen by the ministry in July.

In a letter to the director of the Europe Asia Pipeline Company (formerly the Eilat Ashkelon Pipeline Company), Environmental Protection Ministry director Galit Cohen explained that there is “no room to allow for an increase in the volume of oil transportation in Eilat.”

She said the ministry is adopting a policy of “zero additional risk” regarding its Red Sea port off the Eilat coast and that the EAPC’s agreement with the UAE “would significantly increase the environmental risks.”

The now shelved agreement would have allowed the UAE to use Israel as a land-bridge through which to channel roughly 14 million tons of crude oil destined for southern European markets. The oil would’ve arrived in Eilat, on the Red Sea, and been piped to Ashkelon on the Mediterranean coast for loading onto Europe-bound tankers.

The Europe Asia Pipeline Company’s oil boom in Eilat, designed to catch any potential oil spill before it leaks more broadly into the sea. (Courtesy: EAPC)

Earlier this week, an indictment was filed against the EAPC over its alleged involvement in a 2014 oil spill that damaged the Evrona Nature Reserve adjacent to Eilat. The state company has insisted that the leak was an isolated incident.

EAPC has claimed that canceling the deal could harm Israel’s burgeoning relationship with the UAE, but last month a senior Emirati official told The Times of Israel that scotching the deal would not impact diplomatic ties between Jerusalem and Abu Dhabi.

“We have clarified to the Israeli government that this is not a government project. There’s very close communication at the highest level,” the official said. “Israel is aware that this is not a UAE government project but rather a private commercial deal.”

Protesting against the expansion of activity at the EAPC oil port in Eilat, southern Israel, on February 10, 2021. (Egor Iggy Petrenko/Coast Patrol)

Despite a historic reliance on oil, the UAE has indicated it plans to move away from fossil fuels, and recently became the first Gulf country to commit to net-zero carbon emissions by 2050.

In a statement, the EAPC said Environmental Protection Minister Tamar Zandberg did not have the authority to scuttle the deal, claiming it was supported by the rest of the government.

“As is well known, the Finance Ministry has determined that this is [within] the company’s authorized and regular activity. Violation of the agreement will damage the credibility of Israeli companies, certainly government companies, and will cast serious doubt on their ability to abide by agreements,” the statement added.

The Kan public broadcaster said that the EAPC planned to appeal the decision, though it was not immediately clear how it intends to do so.

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