Gov't payment to speed up gas pipeline construction

Work on the pipeline now is expected to be completed in the second half of 2007.

Construction on the 135-kilometer segment of gasline from Kiryat Gat to Sdom on the Dead Sea will accelerate after the state made an initial NIS 90 million payment to Israel Natural Gas Lines, the National Infrastructure Ministry said Sunday. Work on the pipeline now is expected to be completed in the second half of 2007. The ministry said delays were expected to be prevented by an order signed by outgoing National Infrastructure Minister Binyamin Ben-Eliezer that extends Israel Natural Gas Lines' license period to 30 years from 15, which would help the company raise the capital needed for construction of the segment. The license was also altered to increase the number of customers receiving the natural gas through the delivery distribution system, instead of directly from the pipeline. This was intended to bring down the costs of establishing the distribution network and reduce tariffs, which would in turn facilitate the distribution of natural gas to smaller potential consumers, including industrial and commercial facilities. National Infrastructure Ministry Director General Eli Ronen called the step a "significant breakthrough" for the country's natural gas system, noting that it would be of particular benefit for industrial facilities along the segment's length. Some 60 percent of Israel's natural gas already is consumed in the south. Work on the Sdom-bound segment would follow construction of an initial pipeline curving from Ashkelon to Ashdod, via Kiryat Gat and Gezer, scheduled for completion in July 2006. The first part of that segment already has been completed. The full cost of the Dead Sea pipeline's construction is not yet known, but the 92-km Ashkelon-Ashdod loop ultimately is estimated to cost roughly NIS 280m. The system is being built by Solel Boneh and the Italian firm Ghizzoni. A third limb in the system is planned to bring natural gas north to the concentration of industrial facilities on Haifa Bay. That segment, however, has yet to receive government approval and funding. The ministry will continue working towards construction of a Haifa-bound pipeline, Ronen said.