BG calls off sale of Gaza gas field to Israeli company
British Gas (BG) has called off a deal to sell one third of its offshore natural gas concession in Gaza to Israel’s Merhav Group. Under the proposal, BG was to hand over a portion of its Palestinian gas field to Merhav in exchange for the Israeli company’s assistance in arranging the supply of the Palestinian gas to Israel and Egypt.
According to BG, Merhav’s President Joseph Maiman was demanding a third of the Gaza concession “without payment. We decided not to surrender to his demands, since he offered nothing in exchange, except to use his connections with and influence on decision-makers,” reported Globes.
As part of a wider project for building a gas pipeline from Egypt to Turkey to bring Egyptian gas to Israel, the Palestinian Authority and Jordan, the two firms held preliminary negotiations last year to cooperate in supplying natural gas to the Israel Electric Corporation (IEC) under Merhav’s 15-year contract valued at $150 million.
A final agreement was based on an Egyptian condition that would oblige Israel to purchase gas from Gaza in partnership with the Palestinian Authority. As a result, Israel would buy natural gas only from the Gaza fields and BG would participate in Merhav’s IEC contract.
This past April Egypt cut off all contacts with Israel over the supply of natural gas. The Arab state had committed to supplying Israel with seven billion cubic meters of gas annually. The fuel was to have been supplied through the Israeli-Egyptian pipeline company EMG, owned by Merhav. The Egyptians explained that it would be easier for them to fulfill their commitment if Israel were to buy Palestinian gas from Gaza as well.
The Gaza field was discovered in 1999 by BG and its partner, the Athens-based Arab-owned Consolidated Contractors Company (CCC), which holds a 10 percent stake in the venture. BG has paid Yasser Arafat's Palestinian Authority )PA) $40 million for the exploration and drilling concession of the Marine 1 site. — (menareport.com)
© 2003 Mena Report (www.menareport.com)