The Israeli government is holding secret talks with the Palestinian Authority in a bid to develop a gas reservoir located about 36 kilometres from the shores of Gaza, according to reports from Channel 13 News in Israel on Thursday.
According to the reports, the discussions were held with the approval of Israeli Prime Minister, Benjamin Netanyahu and the Minister of Defense Yoav Gallant and is part of the political and security discussion between the two sides following recent summits in Aqaba and Sharm el-Sheikh.
The Israeli government held internal talks last year on developing the gas field off the coast of Gaza. Talks were renewed more recently following American mediation.
Israel has raised concerns that since legally only states have the ability to develop gas reservoirs, the Palestinian Authority cannot do this on its own.
A proposed solution would be for Egypt to sponsor the project. Israel, according to the Israeli news channel, has already approached senior Egyptian officials with the proposal.
Last year an agreement between Israel, the Palestine Authority (PA) and Egypt to revive gas exploration at fields off the coast of Gaza petered out following discussions between the parties.
The deal would see an Egyptian company facilitate natural gas production in the offshore fields using Israeli infrastructure.
The cash-strapped Ramallah-based PA, represented by the sovereign wealth vehicle Palestine Investment Fund (PIF), will reap 27.5 percent of profits from the field.
PIF’s partner, the Palestinian-owned Consolidated Contractors Company (CCC), will get another 27.5 percent. The remaining 45 percent will go to the Egyptian Natural Gas Holding Company (EGAS), which will operate the project.
Israeli objections and obstacles
The Gaza gas fields were first discovered in 1999 in Palestinian territorial waters.
The first discovery, located about 36km off the coast, was called Gaza Marine 1 and contains an estimated 33 billion cubic metres of natural gas. The second field, located on the sea border area between Gaza and Israel, was called Gaza Marine 2 and contains an additional three billion cubic meters.
The fields have long been seen as a major stepping stone towards Palestinian energy independence but they remained untapped mainly due to Israeli objections and obstacles.
In November 1999, a 25-year contract for gas exploration and development of gas fields was signed between the British Gas Group (BG Group), the CCC and the PIF.
BG Group withdrew from the project in 2016 and handed it over to Shell, which in 2018 also withdrew from the agreement due to various disputes.
The annual income for the PA from the gas field once the operation is underway will be between $700-$800m, equivalent to $7-8bn within 10 years.
Source: Middle East Eye
