Israel energy officials to meet with Gazprom next week

Israel energy officials to meet with Gazprom next week

Jerusalem (Platts)--17Mar2006

Israel ministry officials are to meet a Gazprom delegation due to visit the
country next week, an official in the Israeli National Infrastructure Ministry
said Friday.

Israel's Acting Prime Minister Ehud Olmert is due to meet with the
delegation which will be led by Gazprom chairman Alexei Miller. The
delegation will also meet with Israel's National Infrastructure Minister
Ronnie Bar-On and senior ministry officials.

The National Infrastructure Ministry official said that Israel attaches
great significance to the visit and this is underscored by the meeting with
the acting prime minister.

The visit comes as Israel is searching for additional natural gas
suppliers as the country's demand is due to increase sharply in the coming
decade. The talks are expected to focus on plans to extend the Blue Stream
pipeline from Turkey to Israel or the setting up of a liquefaction plant in
southern Turkey for exporting LNG to Israel and a number of southern European
countries.

Last month Turkey and Russia announced plans to extend the Blue Stream
pipeline to Israel. The announcement was made after talks Turkish Energy
minister Hilmi Guleron and Gazprom's Miller. Israel formally asked in October
for the extension of the pipeline in order to increase competition and the
number of suppliers. The Blue Stream pipeline has a potential of 12 billion
cubic meters a year but is currently only pumping 3bcm of gas. The proposed
extension would be a marine pipeline running from Ceyhanto Israel's northern
Mediterranean coast where it would link up with the planned natural gas common
carrier.

Israel has been looking for additional suppliers of gas. The estimated
cost of extending the pipeline is put at over $1 billion. At present the Yam
Thetis consortium which has discovered gas off of Israel's southern
Mediterranean coast is supplying the state owned Israel Electric Corp.

A second agreement with the East Mediterranean Gas (EMG) was signed
last year for supplies from Egyptwhich are due to begin arriving in 2007.
However Israel's National Infrastructure Ministry is keen on additional
suppliers as the Yam Thetis reserves are due to run out in 10 to 15 years and
the ministry does not want to become wholly dependent on Egyptian gas. In
recent weeks Israel has also resumed talks with British Gas for possible
supplies from its Marine field off the Mediterranean coast of the Palestinian
controlled Gaza Strip.

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