Israel electricity utility urges more natural gas pipelines

State-owned Israel Electric Corp (IEC) on Wednesday called on the government and natural gas producers to build more pipelines to prevent disruption to gas supplies.

Israel has one pipeline to deliver gas from various fields off its Mediterranean coast. It was built for gas supplies from the Yam Thetis site to the southern city of Ashkelon.

But Yam Thetis is depleted and has been largely replaced by the large Tamar well off the northern shore that came online in March and the pipeline now runs from Tamar to Ashkelon.

Noble and Delek are the main partners in the Tamar gas field, estimated to contain 10 trillion cubic feet (tcf) of gas.

IEC Chairman Yiftach Ron-Tal said at least one more pipeline is needed, but ideally, Israel needs four – two in the north and two in the south.

« If there is a failure in the pipeline, we will have to go back to diesel for 50 percent of our energy generation, » he told a conference. « I call on Delek and Noble Energy to develop a new pipeline. »

Some 48 percent of IEC’s electricity generation comes from natural gas, up from 13 percent a year ago. Coal makes up most of the rest with a 1 percent contribution from renewable energy sources.

IEC aims for renewable energy to generate 10 percent of its electricity in another 10 years.

Yakov Hain, IEC’s executive vice president, said the financially strapped utility has improved this year with the start of natural gas supplies after using more expensive diesel and fuel oil for electricity generation last year.

IEC’s debt has swelled to about $20 billion and has been kept afloat by bond offerings. Hain said further bond issuances cannot be ruled out unless the state approves more increases in electricity rates.

To help its financial position, IEC is looking outside Israel. Last week, the European Commission approved the building of an undersea cable that will ultimately link Israel to the European electricity grid. A cable from Israel to Cyprus is slated to be completed in 2017 while an extension to Crete and Greece should be open in 2018.

« We can be a supplier of electricity to Europe, » Hain told Reuters on the sidelines of the conference. « From Israel, where gas is cheap, we can sell to Cyprus. »

Hain also said IEC – through a 50-50 venture with a private company – was in talks with some of its global peers to sell its cyber activities and that at least one contract should be signed by the end of the year.

IEC says there are hundreds of thousands of attempts to crash Israel’s electrical system every day.

The company has set up a centre to train experts how to prevent such cyber attacks.

 

 

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