Walid Khadduri. Al Hayat. 02/07/07. Upon the discovery of the gas field (with its estimated one trillion cu ft of gas reserves), Israel claimed that it extends to its regional waters; therefore it demanded its share in it, to co-develop it and to divide its gains with the Palestinian party. However, the geographical coordinates proved that it was entirely inside the Palestinian waters, thus rebuffing the Israeli claim. According to the London Times, the deal with Israel is estimated at around 4 billion dollars. If signed and executed, it is expected to provide the Palestinian National Authority with around 100 million dollars per year in royalties for its share in the project. The overall value of exports from Gaza to Israel is around 360 million dollars yearly, while exports from Israel to the Gaza strip reach 750 million dollars per year.
Beirut - Natural gas production and export in the Mediterranean waters off of the coast of Gaza strip bring an added dimension to the ongoing conflict between Fatah and Hamas over the political control of the strip.
The Gaza marine field was discovered in the late 90's by the British Gas company BG Group, but its development was belated on account of the political complications and issues related to the Palestinian cause and the Israeli debate on the safety of gas installations from an Arabic source.
Upon the discovery of the gas field (with its estimated one trillion cu ft of gas reserves), Israel claimed that it extends to its regional waters; therefore it demanded its share in it, to co-develop it and to divide its gains with the Palestinian party. However, the geographical coordinates proved that it was entirely inside the Palestinian waters, thus rebuffing the Israeli claim. Afterwards, the British BG began studying the possibilities of exporting the Palestinian gas to the nearby Israeli market (since Israel in particular lacks gas reserves and is trying to change fuel in its power stations from coal to gas, while according to MEES, its 2006 production of natural gas from a maritime field in its regional waters did not surpass 223 million cubic feet) in addition to providing fuel to the Gaza power station.
The preliminary negotiations between the British company and the Israeli infrastructure ministry were unsuccessful, due to political reasons (the second intifada and the necessary guarantees to constantly secure the pipelines) and to a disagreement over the costs. BG refused a primary Israeli offer of 3.10 $ per MBTU, taxing it as a non-commercial, very low price considering the worldwide rise in oil and gas prices. Instead, it decided to turn to the Egyptian market, where it exports liquefied gas from Idku, and supply it with additional quantities of gas.
Following strenuous negotiations, the Israeli cabinet headed by Ehud Olmert agreed, by a majority of 21 votes against 3 on 29 April 2007, to import Gaza's marine gas for a higher price than initially offered, i.e. 4.50$ per MBTU, according to MEES.
Despite the official agreement, the signing ceremony still has not been organized between BG and the Israeli ministry of power, which plans to import 1.6 billion cu m of Palestinian gas yearly for 15 years, while the gas is supposed to reach the Israeli company's warehouses in Ashdod through a sea pipeline by 2011 at the latest. According to the London Times, the deal with Israel is estimated at around 4 billion dollars. If signed and executed, it is expected to provide the Palestinian National Authority with around 100 million dollars per year in royalties for its share in the project. The overall value of exports from Gaza to Israel is around 360 million dollars yearly, while exports from Israel to the Gaza strip reach 750 million dollars per year, as published in Yedioth Ahronoth, according to the Institute of Palestine Studies' bulletin on excerpts from Hebrew newspapers.
There are many questions on the serious signing of the commercial contract, especially after Hamas' military coup in the Gaza Strip. Will the Israeli government accept to deal with it instead of the Palestinian national authority, or will it continue to deal with the national authority in Ramallah? How will Hamas react to this policy in Gaza? Will it accept the agreements reached by the Palestinian, Israeli and British parties so far? It is noteworthy that under the government of national unity, presided by Haniya and following the Mecca agreement, neither the prime minister nor the Hamas movement made any public objections to the project or the ongoing negotiations to put the final touches to the commercial agreement.
http://english.daralhayat.com/business/07-2007/Article-20070702-868d3d59-c0a8-10ed-0082-a494eba38cc2/story.html
The Gaza marine field was discovered in the late 90's by the British Gas company BG Group, but its development was belated on account of the political complications and issues related to the Palestinian cause and the Israeli debate on the safety of gas installations from an Arabic source.
Upon the discovery of the gas field (with its estimated one trillion cu ft of gas reserves), Israel claimed that it extends to its regional waters; therefore it demanded its share in it, to co-develop it and to divide its gains with the Palestinian party. However, the geographical coordinates proved that it was entirely inside the Palestinian waters, thus rebuffing the Israeli claim. Afterwards, the British BG began studying the possibilities of exporting the Palestinian gas to the nearby Israeli market (since Israel in particular lacks gas reserves and is trying to change fuel in its power stations from coal to gas, while according to MEES, its 2006 production of natural gas from a maritime field in its regional waters did not surpass 223 million cubic feet) in addition to providing fuel to the Gaza power station.
The preliminary negotiations between the British company and the Israeli infrastructure ministry were unsuccessful, due to political reasons (the second intifada and the necessary guarantees to constantly secure the pipelines) and to a disagreement over the costs. BG refused a primary Israeli offer of 3.10 $ per MBTU, taxing it as a non-commercial, very low price considering the worldwide rise in oil and gas prices. Instead, it decided to turn to the Egyptian market, where it exports liquefied gas from Idku, and supply it with additional quantities of gas.
Following strenuous negotiations, the Israeli cabinet headed by Ehud Olmert agreed, by a majority of 21 votes against 3 on 29 April 2007, to import Gaza's marine gas for a higher price than initially offered, i.e. 4.50$ per MBTU, according to MEES.
Despite the official agreement, the signing ceremony still has not been organized between BG and the Israeli ministry of power, which plans to import 1.6 billion cu m of Palestinian gas yearly for 15 years, while the gas is supposed to reach the Israeli company's warehouses in Ashdod through a sea pipeline by 2011 at the latest. According to the London Times, the deal with Israel is estimated at around 4 billion dollars. If signed and executed, it is expected to provide the Palestinian National Authority with around 100 million dollars per year in royalties for its share in the project. The overall value of exports from Gaza to Israel is around 360 million dollars yearly, while exports from Israel to the Gaza strip reach 750 million dollars per year, as published in Yedioth Ahronoth, according to the Institute of Palestine Studies' bulletin on excerpts from Hebrew newspapers.
There are many questions on the serious signing of the commercial contract, especially after Hamas' military coup in the Gaza Strip. Will the Israeli government accept to deal with it instead of the Palestinian national authority, or will it continue to deal with the national authority in Ramallah? How will Hamas react to this policy in Gaza? Will it accept the agreements reached by the Palestinian, Israeli and British parties so far? It is noteworthy that under the government of national unity, presided by Haniya and following the Mecca agreement, neither the prime minister nor the Hamas movement made any public objections to the project or the ongoing negotiations to put the final touches to the commercial agreement.
http://english.daralhayat.com/business/07-2007/Article-20070702-868d3d59-c0a8-10ed-0082-a494eba38cc2/story.html
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