Israel Projects Presentation- Utilities

This project is designed to meet Israels long term water needs. It can be modified to meet the needs of other regional parties. The project and its modifications will continue to be discussed in bilateral and other forums. Expected water needs underscore the importance of protecting water storage capacity, as well as for water reclamation.

The proposed programme combines efficient demand management, protection of natural water resources and the creation of marginal water resources through desalination to develop a long-term integrated strategy of resource management for the future. It involves:

Phased desalination of Mediterranean sea water at two facilities:

• On the coast near Hadera and one at Hamadiya in the Jordan Valley;
• Construction of a pipeline diverting surface water from the upper Jordan River directly to the national water supply. Desalinated water from the Jordan Valley plant will replace the diverted surface water that would otherwise have been destined for the Sea of Galilee.

At the Hadera desalination plant, water will be partially desalinated to a level of 850 mg/liter. This water will be conveyed to the Jordan Valley for additional desalination. Brine from the desalination process will be returned to the sea. Intake will be through the Hadera electric power station. This will enable optimization of sea water for both cooling and Reverse Osmosis (RO) purposes.

After leaving the Mediterranean desalination facility, the partially desalinated water will be conveyed via a small tunnel in the Carmel Mountains to a location in Ramat Zvaim, at an elevation of +50 meters. From this point the water will drop into the second desalination plant in the Beit Shean Valley at -275 meters, creating hydrostatic energy for final RO desalination. Approximately 800 MCM/yr marginal water will be created in this manner; only 7 MCM/yr will be conveyed along the lower Jordan Valley to the Dead Sea;

Approximately 200 MCM/yr desalinated water from the Beit Shean Valley facility will be conveyed to the Sea of Galilee. The salinity level of this water will approximate that of the upper Jordan River water (50 mg/liter) and will replace water diverted from that source. The remaining 600 MCM/yr will be desalinated to a salinity level of 280 mg/liter and will be used for various regional allocations. These can include uses by parties residing outside of Israel.

A pipeline will convey 200 MCM/yr water from the upper Jordan River (at an elevation of +150 meters) directly to the national water system. The carrier will rely on gravitational pull and will optimize water supply management in several important ways:

1. It will eliminate costs of pumping 200 MCM/yr water from the Sea of Galilee;
2. In winter, fresh water from the upper Jordan will be conveyed to the coastal aquifer. Water from this source is less saline than that in the Sea of Galilee, (30 mg/liter rather than 200 mg/liter) and its infusion into the aquifer will help rehabilitate this important source of groundwater;
3. The storage capacity of the Sea of Galilee will be enhanced without having to incur capital investment costs.

A survey conducted on the proposed project indicates that the enhanced regulation of the Sea of Galilee and injection of desalinated water during years of drought can be expected to have a cumulative positive impact on the quality of Galilee water.

The project can be implemented in stages, reflecting incremental development of water demand. The table below summarizes three scenarios of project development:

Scenario A: Development of 216 MCM/yr capacity from year 2005 throughout the planning horizon of the project. This scenario will enable the diversion of upper Jordan River water and regulation of the Sea of Galilee but will not create new water sources for additional usage.

Scenario B: Full-scale development of a 850 MCM/yr capacity from the year 2005 throughout the planning horizon.

Scenario C: Incremental development starting with a 430 MCM/yr capacity in year 2005, increasing to 640 MCM/yr by 2010 and 850 MCM/yr by 2015.

	Year	Flow from Medite- rranean		Desa- linated at Hama- diya	Flow to Sea of Gali- lee		Flow to Dead Sea	Net Avai- lable for Other Uses
		MCM / Yr	Sali- nity	MCM / Yr	MCM / Yr	Sali- nity	MCM / Yr	MCM / yr	Sali- nity
A	2005	216.3	845.0	200.0	200.0	50.0	16.3	0.0	0.0
B	2005	851.0	845.0	800.0	200.0	50.0	51.0	600.0	280.0
C	2005	428.0	845.0	400.0	200.0	50.0	28.0	200.0	280.0
	2010*	212.0	845.0	200.0	0.0	¾	12.0	200.0	280.0
	2015*	211.0	845.0	200.0	0.0	¾	11.0	200.0	280.0

* Incremental flows
Source: Israel Water Planning, Ltd. , The Mediterranean-Jordan Plan: Phased Desalination, 1997.

b. Project Costs

Total discounted project costs at a 5% discount rate for the 850 MCM/yr project comes to $800 million for the staged investment alternative (scenario C) and $900 for the immediate full-scale alternative (scenario). Required investment for the smaller (200 MCM/yr) project comes to $360 million. Estimated investment, energy and annual maintenance and operation costs are summarized below:

Cost Item	Scenario A	Scenario B	Scenario C
Hadera-Hamadiya Segment:
Capital Investments	175.0	481.9	420.9
Energy consumption	68.6	233.5	214.6
Total	243.6	715.4	635.5
Hamadiya-Dead Sea Segment	20.1	42.9	42.9
Hamadiya- Sea of Galilee:
Capital Investments	38.6	38.6	38.6
Energy	34.1	34.1	34.1
Total	72.7	72.7	72.7
Total Project	361. 0	892.7	805.6
Annual Maintenance and Operation Costs	1.6	4.0	3.6

Source: Israel Water Planning, Ltd. , The Mediterranean-Jordan Plan: Phased Desalination, 1997.

The estimated unit cost of water for Israeli consumers produced from this project comes to $.73 for 800 MCM\yr scenario and $.80 per cubic meter for the 200 MCM/yr scenario.

a. Background

Natural gas will be a new source of energy for Israel and it is the intention of the Israel Ministry of National Infrastructure that it will be made available to all sectors of the economy (power generation, industry, commercial, residential).

According to the National Gas Project Management, the forecast demand for natural gas is as presented in the following table.

Segment	2000/1	2005	2015	2025
IEC*	1.8	2.5	5.0	7.0
Rest of market	0	2.0	3.0	5.2
Total	1.8	4.5	8.0	12.2

* Israel Electric Corporation
Source: Tahal - GasUnie, IEC.

The goals of the project are two-fold:

1. To supply 1.8-2.0 BCM to IECs coastal power stations at Ashdod, Tel Aviv and Haifa by the year 2001.
2. To develop the Israeli gas market by supplying gas to the electrical, industrial, commercial and residential sectors as soon as right of way is available.

The Ministry of National Infrastructure distinguishes between two stages of development:

Stage A - whereby the market is being developed and Israel Gas Company (IGC - to be chosen by international tender) will be given exclusive rights and responsibilities to develop the market except IEC, which has been authorized to commence negotiations with suppliers to purchase gas for its own use.

Stage B - whereby the market has matured and can be opened up for competition.

The project is to be governed by the following principles:

• The Government will not be involved in the commercial side of the project.
• The development of the market will be done by the private sector through international tender.
• IEC will be allowed to purchase its own gas.
• IGC (Israel Gas Company) will be responsible for developing the market.
• Upon maturity the market will be opened and non-discriminatory access will be granted to all types of infrastructure.

c. Costs

The involved parties have estimated the investment in the supply and transportation system of the gas from Israels territorial water boundary to the distribution points in the region at an amount which could reach $1 billion. IEC has published a request for information from potential suppliers and negotiations are about to commence.