* Project will ensure energy security, allow exports *
Israel and Cyprus began a feasibility study on Sunday for the construction of an underwater electric cable between the two countries that would ensure their energy security and offer Israel a channel to export energy to Europe.
The Israel-Cyprus leg, with an estimated cost of half a billion euros ($660 mln), would eventually be part of a much longer cable continuing to Greece and from there to the pan-European electricity grid.
If approved, the EuroAsia Interconnector will stretch 1,000 kilometers in total at a maximum depth of 2,000 meters, making it the most ambitious project ever of its kind, said Nasos Ktorides, chairman of DEH Quantum Energy.
Ktorides signed a memorandum of understanding in Jerusalem with his partner, state-owned Israel Electric Corp (IEC), to begin the feasibility study that should be completed by year end. The cable itself will take three years to build. It is expected to cost 1.5 bln euros.
"Israel will no longer be an energy island," said IEC Chairman Yiftah Ron-Tal.
DEH Quantum Energy is comprised of Greece's Public Power Corp. (DEH), Cyprus's Quantum Energy and Bank of Cyprus. Quantum is already heavily invested in energy projects in the Balkans.
Israel Energy Minister Uzi Landau has promoted building the submarine cable that will carry 2,000 megawatts in both directions, allowing Israel to sell electricity when production is high and have a back-up when reserves drop.
Israel recently discovered huge deposits of natural gas in the eastern Mediterranean and is studying ways to export much of the reserves once the offshore fields begin production in the coming years.
"This cable would bring us more stability and security," said Laundau, who has warned of serious risks of blackouts this summer due to a short-term energy shortage.
Cyprus has reported its own natural gas discovery and last month opened a second hydrocarbons licensing round, offering 12 offshore blocks for potential exploration.