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. It is seen as one of the most significant collaborations to have emerged since the countries established diplomatic ties, The Times of Israel reported.
The MoU is between the Europe-Asia Pipeline Co, controlled by Israel’s government, formerly the Eilat-Ashkelon Pipeline, and the UAE-based MED-RED Land Bridge. 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 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.
The deal is worth $700 million to $800 million over several years, according to the Reuters, which cited an unnamed official with knowledge of the details. The report said supplies could begin in early 2021.
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.