As reported last month in the PTJ, the Israeli Europe Asia Pipeline Company (EAPC) has been active exploring the possibility of transporting oil from the United Arab Emirates (UAE) to Europe via a pipeline that connects the Red Sea city of Eilat and the Mediterranean port of Ashkelon. This comes in the wake of warming relations between Israel and the UAE.
The EAPC announced on Tuesday of this week that it had signed a binding Memorandum of Understanding (MOU) with MED-RED Land Bridge, a company with Israeli and Emirati owners, in Abu Dhabi on Monday during a ceremony with visiting U.S. Treasury Secretary Steve Mnuchin.
Along with UAE, the partners hope to use their "land bridge", which saves time, fuel and costs versus crossing the Suez Canal, to transport oil back and forth between other countries. It could provide quicker and more economical access for consumers in Asia to oil produced in the Mediterranean and Black Sea regions.
"MED-RED is in advanced negotiations with major players in the West and in the East for long-term service agreements," EAPC said.
Presently the UAE exports the vast majority of its crude oil to Asia.
According to Reuters a source familiar with the deal said that, if finalized, it could be worth $700-$800 million over several years and that supplies could start at the beginning of 2021.
EAPC Chairman Erez Halfon said "there is no doubt that this agreement is of high importance to the Israeli market, both economically and strategically, with joint investments extending a decade into the future."