Friday, December 15, 2006

Pipe Dreams: Samsun-Ceyhan-Ashqelon-Eilat

A map showing the B-T-C Pipeline (Source: Wikipedia)

A number of new oil and natural gas pipelines have made the news in the past year. The most high-profile one was the recently completed Baku-Tbilisi-Ceyhan pipeline, which transports oil from Azerbaijan to the Turkish Mediterranean port of Ceyhan and is quickly becoming a major energy hub. This week, a 690 km natural gas pipeline running parallel to it began feeding gas from the Shah Deniz field in the Caspian Sea off Azerbaijan to Georgia and Turkey (Financial Times, December 14, 2006, p. 3).

The new pipeline, built by British Petrol and several partners, connects Baku to Erzurum in eastern Turkey, from where the gas will be fed to the port city of Ceyhan. The pipeline will eventually be able to carry gas to Europe. U.S. policymakers hope that it will challenge Russia's near-monopoly over gas export pipelines out of the Caspian Sea and Central Asia. Gazprom, Russia's largest company and Central and Eastern Europe's main supplier of gas, has recently raised its prices (even to allies such as Belarus), threatening the economies of U.S. allies Georgia and Ukraine. Notice also that the pipelines draw a big circle around Iran as well as Armenia.

While the Baku-Tbilisi-Ceyhan oil pipeline and this new Baku-Erzurum gas corridor aim to provide an alternative to Russian energy with an eye to Europe, a different project announced this week will feed gas, oil, and water from Russia to the Levant and possibly beyond it. Turkey and Israel are cooperating to build an underwater pipeline from Ceyhun to Ashqelon (see Ha'aretz, the Washington Times, and Zaman). Feeders will also provide water and energy to Lebanon, Jordan, and the Palestinian Authority. Gazprom is planning to increase gas delivery across the Black Sea to the Turkish city of Samsun from where it will continue to Ceyhan. Check out Encarta's World Atlas for regional maps showing Ceyhan (in the Turkish province of Adana) and Ashqelon.

The Israelis, for their part, will make use of a pipeline from Ashqelon to Eilat. Until now, crude oil has been pumped from Eilat northward to Ashqelon and Haifa. The recently-completed "Reverse Flow Project" will allow oil and gas to be pumped in the opposite direction, from Ashqelon to Eilat (Eilat-Ashkelon Pipeline Company). From the port in Eilat, oil can be shipped further east via the Red Sea - at competitive prices (so argue the backers of the plan). The project has excited India, which is hoping to diversify its energy sources as its economy grows. China and South Korea could also benefit (People's Daily Online).

Israel currently imports most of its oil from Russia by oil tankers, which ship the crude from the Black Sea through the Bosphorus to Haifa, where Israel's refineries are located (Washington Times). Congestion on this waterway has driven up the price of shipping, which was the main reason for the recent cancellation of a deal with Turkey to provide Israel with fresh water (it turned out that the increase in shipping costs made the water more expensive than fresh water produced in Israel by its desalination refineries).

With all these pipelines, the Maccabees probably wouldn't have had to worry about making the oil last. Happy Hanukah - חנוכה שמח!

Addendum: The website of the Eilat-Ashkelon Pipeline Company mentioned above has two interactive, animated maps, giving you a very good sense of the movement of oil and gas within Israel, and from Russia, the Caucasus, and Central Asia to east Asia via Israel.

No comments: