Embattled Eilat-Ashkelon Gas Deal Has No Bearing on UAE-Israel Relations, Official Says

With a proposed plan to send petroleum through Israel being challenged by environmental groups, the United Arab Emirates is reasserting that while it helped ease the deal along, the government isn’t directly involved, so the pipeline’s fate will have no bearing on Israeli-Emirati relations.

“We have clarified to the Israeli government that this is not a government project. There’s very close communication at the highest level,” an anonymous senior official at the Emirati embassy in Israel told the Times of Israel on Thursday. “Israel is aware that this is not a UAE government project, but rather a private commercial deal.”

“The UAE is looking to invest heavily in renewable energy and to move quickly and intelligently to a world after oil,” the official added. “And in energy, renewables and developing next-generation clean fuels, are items of interest in the state’s relationship with Israel.”

By contrast, one of the companies involved in the deal, the Israeli state-owned Europe Asia Pipeline Company (EAPC), told the Israeli Supreme Court in July that “significant damage to the foreign relations of the State of Israel.”

The proposed deal would see crude oil shipped from the Persian Gulf to the Israeli port city of Eilat, on the Red Sea, and pumped via an existing pipeline to the Mediterranean port of Ashkelon, by way of Beersheba. From there, it would continue on to European buyers. However, the gas wouldn't be from the UAE, which sells its gas to East Asian buyers.

The gas deal was challenged at the high court by the Israel Nature and Parks Authority, which has been highly critical of the pipeline and warns that a leak could be catastrophic for the environment and economy. The pipeline was responsible for a massive spill in 2014, the largest environmental disaster in Israeli history. Some 5 million liters of crude oil were spilled into the Arava desert and Evrona Nature Reserve, causing $87.6 million in damage and medical problems for more than 80 people.

Partners include several private firms, as well as firms with a direct or indirect connection to the Israeli or Emirati government. One is the EAPC, a nationalized Israeli firm originally intended as part of a secret partnership with the Imperial State of Iran prior to the 1979 Islamic Revolution. The other partner is Med-Red Land Bridge, a firm jointly owned by the Abu Dhabi-based conglomerate National Holding and two Israeli companies - AF Entrepreneurship and Lubber Line.

Reuters reported in October 2020, when the deal was announced, that according to a source familiar with the deal it could be worth $700 to $800 million over several years. However, no specific details about the deal were released at the time and few have gotten out in the year since.

Just weeks earlier, the UAE and Israel formalized their diplomatic ties in the first of the Abraham Accords coordinated by the United States. According to the official who spoke with ToI, although the two states signed a commercial memorandum of understanding early on, the gas deal was unconnected to those developments.

However, the Israeli financial paper Globes reported on Thursday that if the deal to send gas through the EAPC’s pipeline were cancelled, the project could be shifted to the neighboring Egyptian port of Taba, just a few miles away. From there, an overland pipeline crosses the Sinai desert to the Mediterranean port of Arish.