By Dr. Frank Musmar
The historical peace agreement and full normalization of relations between Israel and the Gulf States could lead to more substantial economic, political, technology, health care, education, tourism, and cultural ties between the countries’ governments and their people. Moreover, the Accord is the foundation to expand energy trade from the Gulf States through Israel to supply the world. Accordingly, On Tuesday, January 5, 2021, Saudi Arabia and its allies ended their three-and-a-half-year feud with Qatar and signed the Al-Ula agreement to strengthen unity and cohesion among the Gulf Cooperation Council (GCC). Settling the political differences could lead to the gas deal of the century.
The future gas deal’s keystone is the highly strategic 42-inch and 158-mile Trans-Israel Pipeline (TIPline), with a capacity of 1.2 million barrels /day from Eilat to Ashkelon. The pipeline was established in 1968 and extended from Eilat to the Mediterranean port Ashkelon which during the era of Iran’s shah to bypass the Suez Canal. Abraham Accord is a lucrative opportunity to carry natural Gas across Saudi Arabia to the Trans-Israel Pipeline and Europe. The Pipe is used to pump the unloaded oil in Ashkelon from Azerbaijan and Kazakhstan to tankers in the Gulf of Aqaba for transport to China and South Korea.
Qatar is planning to increase its annual liquefied natural Gas by 64% to reach 126 million tons by 2027. A Saudi gas deal with Qatar will help the Saudi kingdom to solve the shortage in gas supply. It will replace the 900,000 b/d of liquid fuels that the kingdom used for industrial and power generation, generating more than $10 billion of additional export revenue.
In October 2020, MED-RED Land Bridge, an Emirati/Israeli owned company, and EAPC, the Israeli-owned pipeline company, signed a memorandum of understanding to make Israel a transshipment hub by storing and transporting oil from the UAE to Europe using the Trans-Israel Pipeline. The UAE has a production capacity of 4 million Bbl /d, sells most of its oil to Asia, and sells refined products to Europe via tankers traversing the Red Sea. Other members of the Gulf Cooperation Council are likely to follow, most likely Saudi Arabia and Qatar.
Ending the feud with Qatar and Abraham’s Accord could lead to the gas deal of the century. The UAE oil will connect to the Shaybah Abqaiq pipeline to the East-West pipeline. The Qatari Gas will connect to the East-West pipeline, which transports the Saudi raw materials from Ras Tannurah on the east of the country to Yanbu’s western port at the Red Sea. The East-West pipeline is about 1170 km and 5 million Bbl. /day (planned to increase it to 6.5 Bbl. /day by 2023) capacity and its parallel gas pipeline have a capacity of 290 thousand barrels a day. Connecting the East-West pipeline with Trans-Israel Pipeline will be the deal of the century.
The oil / Gas deal between the Gulf States and Israel will be beneficial to all parties. First, the Gulf States will no longer worry about Iran’s piracy and sabotaging the oil tankers. Second, using the Trans-Israel Pipeline offer an advantage over the Suez Canal, especially that the Canal cannot accommodate the giant supertankers. The Gulf States charter two small tankers through the Canal instead of one supertanker and pay $300,000-$400,000 / one way for each tanker. Using the Trans-Israel Pipeline will be significantly cheaper than using the Suez Canal.
Expanding the East-West Pipeline will provide more flexibility in exporting oil for Saudi Arabia and rerouting the 2.5 million Bbl. /day that the Saudi export through the Strait of Hormuz to Yanbu at the Red Sea in scenarios where the Strait of Hormuz is closed or partially blocked due to aggression from the Saudi rival, Iran, or due to any clashes between Iran and the Saudi allies USA and Israel. Accordingly, connecting the East-West Pipeline to the Trans-Israel Pipeline will create a safe alternative of exporting oil for the Gulf States. Most importantly, the Saudi must resolve the Yamani problem to keep a safe route of oil-exporting to East Asia while their tankers pass through the Bab El Mandeb Strait.
To ensure Bab El Mandeb Strait’s safety, Saudi Arabia and its allies must negotiate the Qatari support for Houthis while ending Qatar’s feud. The Middle East News agency reported on July 21, 2020, that Yemeni Prime Minister Maeen Abdul Malik Saeed accused Qatar of supporting the Houthi militia with money, arms and media to spread chaos to destabilize Yemen. “Several US contractors have provided evidence of Qatar’s role in financing and providing drones for the Houthis. It links members of the Al Thani inner circle”. Human rights lawyer & national security analyst Irina Tsukerman said.
In January 2020, six states and the Palestinian Authority established the EasternMed Gas Forum that seeks to promote natural gas exports and is open to more members that wish to provide natural Gas or crude oil to others in the world. The current members are Egypt, Israel, Greece, Cyprus, Italy, and Jordan. The United States suggested this forum to make energy available and to create economic opportunities for the region. The members of the Gulf Cooperation Council are likely to join the forum.
The normalization of ties with the Gulf countries and the future oil and gas initiatives will make Israel a transshipment hub and deprive Turkey of its role as an energy hub. Israel’s discovery of the massive natural gas fields and the Gulf States gas and oil flowing through the Trans-Israel Pipeline will open the doors for Europe to cut out Russia and diminish Turkey’s role as a gas bub and constitute a massive economic setback.