British Oil Expert Says Israeli, Egyptian Pipelines Not Likely to Compete with Tankers

A British oil expert said here yesterday that the Israeli oil pipeline now under construction between Eilat and the Mediterranean and a projected Egyptian pipeline paralleling the Suez Canal were not likely to be economically competitive with supertankers in the transportation of oil from the Persian Gulf to northwest Europe.

Walter L. Newton, director of Petroleum Economics Ltd., of London, spoke at the fifth annual petroleum conference at the Transportation Center of Northwestern University here. He said 200,000-deadweight ton supertankers could carry oil more cheaply from the Persian Gulf to Europe via the Cape of Good Hope than the tanker-pipeline combination envisaged by the Israeli and Egyptian projects. The Israeli pipeline will have its western terminus at Ashkelon and will cost $100 million. It is expected to have an initial capacity of 19 million to 20 million tons when it is completed next year and an ultimate capacity of 50 million tons a year. The Egyptian pipeline, from Port Suez to Alexandria, will cost $120 million and is expected to have an initial annual capacity of 50 million tons.