USD8bn infrastructure corridor moves ahead
- From: Vol 9, Issue 8 (August 2008)
- Category: General
- Region: Middle East
- Country: Israel and Turkey
- Related Companies: Çalık Holding and ENI SpA
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Israel seems to have accepted that importing water from Turkey makes sense. Is it effectively an admission that Israel’s desalination programme is failing?
The long-awaited USD8 billion multi-purpose pipeline to transport oil, water, natural gas and electricity from Turkey to Israel is again at the top of the regional agenda. Israel’s Infrastructure Minister Benjamin Ben-Eliezer visited Ankara in late July to meet his counterpart Hilmi Güler in order to lay down the details for the Medstream project, commonly known as the Infrastructure Corridor.
The main sticking point for the Israelis as regards giving the go-ahead for the water part of the pipeline had been the relative unit cost of importing water versus desalinating it domestically. Although senior Israeli sources refused to be drawn on how the relative costs per cubic metre stack up, the result of the late July meeting seems to be that Ben-Eliezer has indicated that he is willing to buy 2.1 million m3/d of water from Turkey via the Infrastructure Corridor.
Israel had earlier planned to import water from Turkey via tankers, but subsequently opted for alternatives such as desalination, after the shipping option proved prohibitively expensive. Carrying water through the proposed pipeline from Turkey’s Mediterranean port of Ceyhan to Haifa in Israel, a distance of some 460km, is now said to be more cost-effective. The pipeline will carry water from Turkey to Israel, the Palestinian Territories and Jordan, according to Ben-Eliezer.
An earlier feasibility study prepared by ENI SpA and Çalik Holding considered several alternatives for the delivery of energy, oil and water, including crude oil (20-50 million tons a year), natural gas (4-10 billion m3/yr), electricity (4,200 MW) and water (1.1-2.7 million m3/d). The main conclusion of the ENI-Çalik consortium is that the project is economically viable, and professional teams from Turkey and Israel will now start work on drafting a framework agreement for a €8 million 10-month comprehensive feasibility study. If all targets are met and the study can be concluded by 2009, the pipeline is estimated to become fully operational in 2012 or 2013.
The appointment of Israeli Minister Ben-Eliezer’s director general, Hezi Kugler, as the coordinator of talks on the minister’s behalf, is a strong indication of how serious Israel regards this project.
The project will be partly financed by the Turkish and Israeli governments, although India has also shown great interest in the project, and has indicated that it wishes to participate as a major investor. Given the scope and the project costs, however, the private sector will also need to shoulder some of the financing.