RAMALLAH: Palestine is preparing a final agreement with an Egyptian company to explore and extract gas from a field off the Gaza Strip.
It is expected to provide millions of dollars to the Palestinian Authority’s treasury and improve the ability of Gaza’s power plant to generate electricity for residents.
Palestinian Authority Prime Minister Mohammed Shtayyieh said at the start of Monday’s weekly government session in Ramallah that the government would form a team comprising several ministers to follow up on the Palestinian gas issue.
He said Palestinian Investment Fund chairman Mohammed Mustafa and his team were negotiating with Egypt to reach a gas deal, in a way that serves Palestinian national rights and benefits.
A senior Palestinian government official who attended Monday’s Cabinet meeting in Ramallah told Arab News that Palestinian Authority government ministries would facilitate the mission of the Palestinian investment fund in issuing the necessary permits.
“The gas extraction project is an important strategic plan for us,” a senior PA government official told Arab News.
“The Prime Minister and the government are very interested in it because it will generate sums of money which will help the government’s treasury.”
The Palestinian Authority commissioned energy company British Gas to conduct gas exploration in the area in 1999.
A year later British Gas found Marine 1 about 30 km offshore, then the smaller Marine 2, but eventually withdrew from the contract.
The project was handed over to energy giant Shell in 2016 to retire two years later.
The Palestinian Gaza Marine natural gas field is located in the Palestinian coastal areas.
The field contains an estimated reserve of approximately 30 billion cubic meters of natural gas.
The cost of developing Gaza’s navy is estimated at $1.2 billion, Palestinian sources said.
The Palestinian Investment Fund and the Consolidated Contractors Company for Oil and Gas are global development partners for the project.
They will cooperate with the main Egyptian natural gas holding company EGAS.
“The talks between the Palestinian coalition companies and the Egyptian company are progressing considerably to reach a final agreement soon,” a senior Palestinian source linked to the coalition companies told Arab News.
The Palestinian government has formed a government committee to monitor progress, the source said.
The source pointed out that there are no negotiations with Israel on this issue. Israel is the occupying power that controls the Gaza Sea, and gas exploration and extraction companies need its approval to enter and operate their equipment in the Palestinian gas fields.
The Palestinian source confirmed that the Palestinian government’s decision, which was made in 2018, gives the coalition of Palestinian companies a 55% stake and gives the other company working in gas extraction 45%.
Palestinian economic expert Samir Hulileh told Arab News that the annual revenue from the Palestinian gas field – if exploited – will be between $700-800 million per year, equivalent to $7-8 billion. within 10 years.
Hulileh added that there would be no extension of the pipeline to the Israeli city of Ashdod, but instead the lines would be extended to the Egyptian city of Al-Arish. The Egyptian company would then process the gas and sell it, along with the Egyptian gas, to Europe.
Part of this gas will be allocated to the Gaza power plant to increase its production capacity.
Israel recently allowed the Palestinian Authority to search for gas off the coast of Gaza thanks to Egyptian mediation and American pressure.
Back. Israeli Major General Giora Eiland, former head of Israel’s Security Council, said Israel should allow the Palestinians to use the gas field.
The net worth of the gas field is $3-4 billion, which is an excellent national economic asset for the Palestinians.
“Let the Palestinian Authority and Hamas discuss and decide to share the benefits of the revenue from this gas field,” Eiland said.