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. Last Updated: 07/27/2016

Israeli Pipe May Carry Russian Crude Supplies

Russian oil could soon be flowing through a pipeline partly built by Iran and alleged by traders to have handled Iraqi crude in the most unlikely of places -- Israel.

An Israeli firm said Thursday it has held talks with companies and traders in a bid to run Russian crude through its controversial Eilat-Ashkelon oil pipeline by the middle of next year.

General Emanuel Sakal, director of the Eilat-Ashkelon Pipeline Co., said the firm would present formal proposals to oil companies in the next few months.

"We want the start by the middle of 2003. We will be making presentations," he said by telephone from Israel. "We have already spoken to some Russian companies and European traders, and they have expressed a strong interest."

Under the plan, Russian crude and possibly other oil from the Black Sea would be reverse flowed from Ashqelon in the Mediterranean to Eilat in the Red Sea through the pipeline, which has a capacity of 60 million tons a year.

The Red Sea outlet would offer international oil companies access to Asian buyers, who rely heavily on the Middle East for imports. EAPC could also provide storage facilities, Sakal said.

"We want as much Russian oil as possible. We don't expect full capacity in the pipeline but we want a lot of oil," he said. "Some companies have talked to us about joint investment in the project."

He declined to say how much investment would be required but said it would not be "too big."

The pipeline has already been used to transport oil from neighboring Egypt.

But shipping agents familiar with the pipeline said crude traffic from Israel's former enemy has fallen to a trickle due to Cairo's objections to Israeli policies toward the Palestinians.

"Three or four years ago, about 2 million tons of Egyptian crude a year was passing through the pipeline. Then that fell to 750,000 tons, and now there is not much Egyptian crude," said a shipping agent.

Sakal declined to comment on how much Egyptian oil or other crudes were passing through the pipeline.

The Eilat-Ashqelon pipeline has survived political upheaval in the Middle East over past decades.

Ironically Iran, a bitter enemy of Israel, still has a stake in the pipeline, which was built in 1968 in cooperation with the late shah before the 1979 Islamic Revolution.

In recent months, rumors circulated in oil-trading circles that crude from Iraq, Israel's other bitter Middle East foe, had made its way through the pipeline.

Sakal vehemently denied that rumor and said Egyptian crude was the only Arab oil that flowed through the pipeline.

"This is absolutely not true," he said.