Gaza: A War and a Gas deal
Israeli and Palestinian delegations were in Cairo to conduct indirect talks brokered by the Egyptians during the on-again, off-again ceasefire.
The two parties have a series of demands they want fulfilled for the fighting to end. Israel requires the demilitarization of Gaza and the disarming of Hamas while Hamas demands the lifting of the economic blockade on Gaza, the reopening of its airport and seaport, the extension of fishing rights off the coast and the release of prisoners held in Israeli prisons. About 2.000 Palestinian have died as a result of the Israel-Gaza conflict, according to Palestinian health authorities. The israelis have declared 64 soldiers killed and three civilians.
Gaza made the news this week for another reason, this time positive. Neighbouring Jordan announced on Saturday through its Minister of Energy and Mineral resources Mohammad Hamed that by 2017 it will be importing a third of its natural gas needs from Gaza’s offshore gas fields. A letter of intent is expected to be signed between the National Electric Power Company (NEPCO) and British Gas Group for this purpose. The Palestinian Authority awarded BG in 1999 a 25 year exploration licence for the marine area off the Gaza Strip. The Gaza Marine field was discovered in 2000, about 36 kilometers offshore in waters 600 meters deep. The field holds an estimated 1 Tcf (trillion cubic feet) of natural gas. The U.S. Geological Survey believes there could be as much as 120 trillion cubic feet of natural gas in the Levant basin.
The commercialisation of the Gaza Marine field has failed to date, due to the various political hurdles in this tormented part of the Eastern Mediterranean. A deal to sell the gas to Israel did not materialise, Israel at the time opting for imports from Egypt instead. In 2005 and 2006, talks to send the gas to Egypt’s Idku LNG plant did not see the day either.
Jordan is in serious need of natural gas since Egypt significantly reduced its supply. Historically, Egypt supplied natural gas to both Jordan and Israel. The 2011 coup in Egypt caused repeated attacks on the pipeline used to deliver the gas to Israel and Jordan. Whilst Israel has since discovered substantial amounts of gas that led to its natural gas independence, Jordan is undergoing a severe energy crisis. The Kingdom imports as much as 96% of its natural gas needs. Jordan has launched several initiatives to solve its energy problems, including efforts to develop indigenous resources and energy efficiency measures.
Jordan's national projects are aimed for the medium term. In the meantime, the Kingdom needs to import natural gas, preferably from a neighboring country via pipeline to reduce the spiking energy bill. With growing natural gas needs and a flat production, Egypt is no longer in a position to export the product. Jordan is now seeking to import natural gas from neighbouring Israel and Gaza. Whether the second deal will see the day will largely depend on the political climate in this part of the world. For Gaza to benefit from a gas bonanza will require the cooperation of Israel.
Related Reading: A Closer Look at the Gaza Marine Offshore Field