(Communicated by the Prime Minister’s Media Adviser)

Prime Minister’s Office Director-General Ilan Cohen today (Sunday), 5 September 2004, decided on the immediate advancement of the construction of a sea transport system that will link the Tethys Sea partnership’s gas platform to the desalination plant south of Ashkelon, which is in advanced construction stages.

Last week, PMO Director-General Cohen toured the gas production platform off the Ashkelon coast and found that it would be economically feasible to establish a sea transport system for the natural gas.  He said that, “After the amended timetable for establishing the land connection was presented to me, as well as the data on the future losses that would be caused by not activating the desalination plant by the planned date, I decided that the initiative to establish a sea link should be advanced as quickly as possible.”

The significance of the non-flow of natural gas by the planned date – July 2006 – would be a $1 million monthly loss to the Israeli economy. Therefore, PMO Director-General Cohen directed that the involved bodies finish the professional checks and agree on the conditions for establishing a sea pipeline as soon as possible.  Thus, the desalination plant will be able to operate by means of natural gas already in 2005.

The use of natural gas is expected to minimize damage to the environment caused by the power plants and will also lead to a reduction in electricity costs.

The cost of the sea transport system is estimated at approximately $20 million; it is expected to be 28 kilometers long.

The production company, the Israel Electric Corp. and users will finance the establishment of the system.

PMO Director-General Cohen’s decision is designed to implement a 1997 Cabinet decision to reform the basket of fuels for the production of electricity in Israel.  It will be recalled that in 2002, a natural gas field was discovered off the Ashkelon coast; in 2003, a production platform and natural gas sea pipeline were built off the Ashkelon coast in order to transport the gas to Ashdod.  In January 2004, Ashdod’s Eshkol gas-fired power plant – which produces approximately 10% of Israel’s electricity – began operations.

The introduction of natural gas for use in Israel has led to savings of approximately $15 million per annum.

The Israeli electricity sector is expected to complete the transition to natural gas by 2012, when approximately 50% of Israel’s electricity will be produced by natural gas.