Failure of negotiations to supply Israel with natural gas from the first Palestinian field
Walid Khadduri Al-Hayat - 03/02/08//
A new-old dispute has emerged to the surface at the height of the Israeli siege of the Palestinian people in Gaza. The parties to the dispute are Israel and British Gas (BG) which owns drilling rights in Palestinian wasters opposite the coast of Gaza in partnership with Consolidated Contractors Company (CCC) and the Palestinian Investment Fund. The "Gaza Marine-1" field was discovered by BG in September 2000.
The discovered gas reserves in the Palestinian waters are estimated at one trillion cubic feet which is a reasonable quantity - neither too small nor too big-relative to the Palestinian economy which lacks heavy industries that demand huge supplies of natural gas to necessary to generate energy. BG had won the exclusive drilling rights to drilling and production in Palestinian waters from the Palestinian Authority in November 1999. It is worth mentioning that BG had also discovered natural gas fields in Israel and Egypt and owns drilling rights in the waters of both countries in addition to many others in various world regions.
Many reasons are behind the dispute between BG and Israel but the main one is about the means of transporting the gas from the gas field in the Palestinian regional water to the new power plant in Gaza. In 2001, BG presented a development plan to the Palestinian Authority to deliver the gas through a pipeline from the field some 36 kilometers off the Gaza coast directly to the power plant. The Palestinian Authority approved the plan in 2002 but Israel has insisted on linking the pipeline to the power plant in Askalan first and then extending it to Gaza (for a detailed map of the pipeline pathway, see Palestinian Studies published by the Palestinian Studies Institute - Beirut, no. 72, p.72, Fall 2007).
Another reason is that Israel wants to know the exact amount of gas entering the Palestinian territories, hence the revenues earned by the Palestinian Authorities, and consequently the amount of money that can be transferred to finance "terrorism." It is estimated that the Palestinian treasury will earn approximately $100 million in annual natural gas revenues. Israel has clung to this argument despite the dispute between Fatah and Hamas.
There are plenty of reasons for the Israeli conditions, all of which have been rejected by GB that has adamantly insisted on delivering the supplies directly to Gaza without passing through Israeli territories as intended in the first development plant proposed to the Palestinian Authority. One company official stated the company's position to the specialized weekly MEES (Middle East Economic Survey) saying that the company has terminated its negotiations with Israel after 18 months because of the failure to reach an agreement over gas prices, revenue allocation (the amount of money that would go to Hamas), and supplying Gaza's natural gas needs (which implies terminating the collective punishment policy which is possible by blocking supplies to the power plant in Gaza if the pipeline were to pass through Israeli territories first). The British company has many alternative options if its negotiations reach an impasse with Israel, including the export of some of the gas supplies to its liquid gas project in Egypt where additional volumes of gas are needed to complete the huge project there.
Needless to mention, Israel had objected to the exportation of Palestinian gas to Egypt in the past on the basis that the Gaza field falls within its sphere of influence which implies that the gas supplies should be supplied to its factories.
Israel has also set plans to transform its power plants to increasingly depend on natural gas which requires discovering larger volumes in Israeli and Palestinian regional waters. However, these ambitions have not realized yet as the discovered volumes remain relatively too limited to enable Israel to shift its power plants to natural gas or to run its new power plants on dual fuel.
The importance of Gaza Marine-1 lies in the fact that it reminds the first discovery of this type in the Palestinian territories on the one hand, and the first attempt by Israel to control petroleum supplies from a bordering field on the other. Production at the field was intended at the end of 2011, but with the negotiations with Israel coming to a halt, delay may be expected.
|
