Gas to supply Gaza gas to Israel
20 June, 2002
The Prime Minister's Office and the Ministry of National Infrastructures
decided to make natural gas reserves off the Gaza coast a key supply
source for Israel. Sources inform ''Globes'' that
they promised British Gas, which produces the gas, that Israel will
buy 1.5 billion cubic meters a year.
The decision will make British Gas one of the three main suppliers
in Israel, alongside Israeli and Egyptian suppliers. Each supplier
is scheduled to sell 1.7 billion cubic meters a year.
The decision is a major policy u-turn about the Gaza gas. Last
year Israel Electric Corporation (IEC), Israel's largest natural
gas consumer, decided not to buy gas from British Gas' Gaza
and Israel offshore fields, mainly because it was more expensive
that the Israeli and Egyptian suppliers. British Gas' partners
in the Israeli fields are Isramco (ISRL), Dor Chemicals, Israel
Petrochemical Enterprises, Clal Industries and Investments and Alon
Israel Fuel Co.
British Prime Minister Tony Blair heavily lobbied Prime Minister
Ariel Sharon on British Gas' behalf in recent months. As a result,
the Prime Minister's Office and the Ministry of National Infrastructures
agreed to buy gas from the Gaza offshore fields, which have tens
of billions of cubic meters in reserves.
British Gas also benefited from its participation in the natural
gas pipeline project with Paz - Africa-Israel Investments, which
means it will also deliver gas. Without British Gas, it is doubtful
if the Ministry of National Infrastructures will approve the Paz
- Africa-Israel consortium's bid in the project's tender
- the only one submitted. The project will cost an estimated $250
Ministry of National Infrastructures director general Yair Maayan
confirmed that British Gas was promised that Israel would buy 1.5
billion cubic meters of gas a year from it. He said it was important
the natural gas market be competitive, with three main suppliers,
instead of two, as previously planned.
Maayan said British Gas had to be promised the purchase of that
amount of natural gas in order to make the costly development of
the Gaza field economical. The agreement with British Gas will be
for 10-15 years.