`Peace Pipeline' May Be Next Casualty in Mideast

Article excerpt

If the authors of the Oslo accords had been correct, the Middle East would now look very different from its old, divided self.

Open markets and regional economic cooperation would have blurred boundaries and given populations a stake in peace.

Instead, one of the showcase projects in this brave new market-driven world, the "peace pipeline" linking Egypt and Israel, is, like the peace process itself, fighting for its life.

How can we have a peace pipeline when there's no peace? an Egyptian gas official angrily asked a reporter in the aftermath of last month's violence in the West Bank and Gaza in which 58 persons were killed and hundreds more wounded, most of them Palestinians.

The 285-mile-long natural-gas pipeline is the biggest regional venture in decades.

As a physical and economic link between the two countries, it also serves as a potent symbol of the "new" Middle East and of the U.S. policy of ensuring peace through economic integration. As such, U.S. officials have been eager to keep the project alive.

"It's important to de-link the political problems from economic integration," Stuart Eizenstat, undersecretary of commerce for international trade, told business associates in New York last month.

"Nothing has led this project to go off track," despite the violence between Palestinians and Israelis, he added.

The pipeline is a multibillion-dollar venture that is to be built by a three-way consortium consisting of the state-owned Egyptian Gas and Petroleum Co. (EGPC), the Italian oil giant Agip and the American oil company Amoco.

When completed, it will send an estimated 70 billion cubic feet of gas annually from fields in Egypt's northern Nile delta region through the Gaza Strip to the Israeli port city of Haifa.

Branch lines are planned for the West Bank and Jordan.

Former Israeli Energy Minister Gonen Segev said in February that his country's demand for natural gas was expected to reach about 141 billion cubic feet a year by 2003.

Israel has been investigating importing gas from the Gulf and former Soviet states, but Egypt's proximity makes it an extremely attractive source. …