(Bloomberg) -- Israel and Egypt are in talks to build a new overland pipeline to boost Israeli gas exports to its neighbor, the Israeli Ministry of Energy said in a statement on Thursday.
The pipeline will run from Israel to the Egyptian border on the Sinai peninsula, and will be operated by Israel Natural Gas Lines, a government-owned corporation. The company declined to comment on the talks. The news was first reported by Reuters.
Israel has discovered large quantities of natural gas in the Mediterranean Sea, with major finds beginning in 2009, and has been exporting supplies to Egypt since last year through an underwater pipeline. Some of that gas is then refined and sent to Europe, where gas prices have soared due to a supply crunch and a surge in demand as the world exits pandemic lockdowns. The new pipeline could increase the amount delivered to European customers in years to come.
“Israel and Egypt are holding talks on possible cooperation in the supply of natural gas. One of the options being studied, following a request by Egypt for further natural gas supplies, is an onshore gas pipeline,” according to the Israeli statement.
Egyptian Energy Ministry officials couldn’t be reached for comment on Thursday, a public holiday.
Reuters reported that the new pipeline would increase the supply of Israeli gas to Egypt by three to five billion cubic meters each year once up and running. The new link is expected cost around $200 million to build, and would be operational within two years, it said.
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