"The Times of India" reports, "Top Oil Ministry officials and senior executives of state-owned refiners who look after crude procurement and shipping operations for their companies held talks with representatives of Eilat-Ashkelon Pipeline Company Ltd., originally an Israel-Iran joint venture that operates a two-way crude and petroproducts pipeline to provide a land bridge between the Mediterranean and Red Seas."
The paper says, "India is gazing at Israel for a passage to energy security in the age of high oil prices, a move that will give Asia's fastest growing economy easy access to the abundant Russian, Caucasian and Central Asian crude as an alternative to volatile West Asian supplies but will perhaps also raise hackles of pro-Arab political elements at home."
"The Times of India" adds, "Though it is early days for a deal, using the Eilat-Ashkelon pipeline will unlock for India the vast reserves of the Caspian and Black Sea regions, considerably shortening the shipping route for Asia. The oil from these regions now has to traverse Turkey and the Mediterranean for onward journey around the African continent to Asia, thus practically remaining out of bounds for India due to the prohibitive shipping costs.
"The pipeline will also open an easier maritime door for oil from Algeria and Libya where India is pushing hard to get acreages and term supplies. The pipeline company executives told the ministry officials that using the Israeli link will also allow Indian refiners to use very large crude carriers and save in shipping costs. The majority of the Indian oil shipments now come in smaller vessels, classified as 'Suez Max', as they have to cross the Suez Canal which cannot take big carriers."
The paper also noted, "This is the second invitation India has received from an international crude transit route operator. As first reported by the Times of India, during Mani Shankar Aiyar's tenure as oil minister, Egypt had offered India partnership in its multi-billion dollar crude pipeline linking the Mediterranean and Red Sea that is being billed as the Suez Canal of oil. The link between the Mediterranean and the Red seas is considered one of the major choke points in global oil routes."
BP plc (NYSE; LSE: BP), Switzerland's Glencore International AG, and other multinational companies in the oil business have expressed an interest in Eilat-Ashkelon Pipeline Company's pipeline as an alternative to the Suez Canal.
Published by Globes [online], Israel business news - www.globes-online.com - on April 21, 2008
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