EIB to finance 30 % of Egypt-Turkey gas pipeline

Feb 23, 2001 01:00 AM

Sources in the energy market confirmed that the European Investment Bank (EIB) would be financing 30 % of the investment required to set up the gas pipeline from Egypt to Turkey. The pipeline, which will be laid by the Israel-Egypt Pipeline company (EMG) at an estimated cost of $ 1.5 bn, is slated to supply Egyptian natural gas to Israel as well.
The board of directors of EIB is scheduled to convene in Alexandria in April to approve the financing, which will be made available in the framework of the European Union's policy to invest in economic projects in the eastern basin of the Mediterranean in an effort to promote economic-political stability and environmental conservation in the region.
EMG is currently involved in talks with a number of international companies, one of which will be contracted to lay the pipeline. Following a review of a number of proposals, it appears that an energy infrastructure company from Western Europe is leading the race.
Talks held between EMG and the Israel Electric Corporation on the supply of 1.7 bn cm of natural gas a year moved forward, with the final contract expected to be signed within 3-4 months. All the necessary approvals for the Egyptian section of the pipeline have been secured, while a schedule for obtaining approvals for the Israeli part of the pipeline has been worked out.

Meanwhile, it was revealed that US Ambassador to Israel Martin Indyk met with the heads of the IEC in an attempt to persuade them to purchase the natural gas from the Yam Thetis consortium. Yam Thetis holds a 45 % stake in the US oil exploration company, Semidan, which provides its Israeli partner with drilling services and the engineering and technological infrastructure for its search operations.
Sources in the Israeli gas exploration industry said that although the issuing of IEC bonds in the United States was not raised in the meeting with Indyk, the "matter did hover in the background." Through its bond issue in the US, the IEC hopes to raise $ 1 mm for the financing of research and development projects in the electricity market.
A senior source at the IEC confirmed the meeting with the US ambassador, adding that he wasn't promised anything. Sources in the gas exploration industry said, however, that the US attempt to influence the commercial considerations of the IEC indicated that the gas Yam Thetis was trying to market to the electricity company was not as "blue and white" (Israeli produce) as it was made out to be.

Source: Haaretz Daily Newspaper
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