With both European businesses and citizens having often been at the mercy of Russia when it comes to supplies of natural gas, a number of European Union (EU) nations have decided to come together with Israel to attack the problem. Their pledged move is to create the world’s largest undersea pipeline.
The country of Greece connected with Israeli and Cyprian interests to create a gas pipeline in the Mediterranean Sea that will stretch approximately 1,248 miles. Energy ministers from those countries and Italy, another potential partner, met on April 3 in Tel Aviv to discuss the framework for a plan that’s expected to cost in the neighborhood of $6.4 billion. Should only Greece be involved, the price is expected to drop to $5.3 billion.
The pipeline will start near oil fields in both Cyprus and Israel, with both countries seen by both Greece and Italy as more politically stable than Russia. In the latter case, the Russian government of Vladimir Putin has often used their vast supplies of gas deposits as a weapon against countries that need the commodity. At present, that reliance mostly is connected to the Nord Stream pipeline.
The Israeli connection became a reality after they discovered what became known as the Leviathan field in August 2015, which was considered the gas discovery of the decade at the time. The estimated minimum potential for this discovery from the Mediterranean is 900 billion cubic meters, though an additional 2,200 billion cubic meters could be available.
The pipeline would be built by IGI Poseidon, which is a joint venture between a pair of energy companies from Greece and Italy, DEPA and Edison, respectively. The pledge won’t fully begin to take shape until 2020, when the decision to invest will be made, and expected completion would be in 2025.
Some construction challenges could end up boosting the amount of money needed to complete the project, with infrastructure costs potentially compromising the supposed value of reduced gas costs. In addition, the current depressed market for gas would have to improve in order for the investment to pay off.