Israel PM gives nod to Gaza Marine gas development, wants security assurances

Israel has given preliminary approval for the development of a gas field off the Gaza Strip.

If concluded, the agreement would be a boost for the Palestinian economy.

Announcing the move on the Gaza Marine project, Prime Minister Benjamin Netanyahu’s office said progress would hinge on “preserving the State of Israel’s security and diplomatic needs.”

The office added in a press statement in Arabic and Hebrew that the project — 36 kilometers from the Gaza coast in the waters of the Mediterranean — falls within the framework of the ongoing negotiations between Israel, Egypt and the Palestinian Authority.

On May 4, Israel’s Channel 13 reported that the government was in secret talks with the Palestinian Authority to extract gas from the field off the coast of the Gaza Strip, with the approval of Netanyahu and Defense Minister Yoav Gallant.

The channel claimed that the Israeli government held internal discussions about the gas field after the administration was formed at the end of last year.

It reported that the talks were renewed as part of the political and security process that began recently between Israel and the Palestinian Authority under US mediation.

The issue of developing the Gaza Marine field and preparing it for gas extraction was at the heart of the talks that took place in Aqaba and Sharm El-Sheikh.

The talks brought together security and political officials from the Palestinian and Israeli sides, under the auspices of the US. Jordan and Egypt were part of the talks.

Tzachi Hanegbi, head of the Israeli National Security Council — who headed the Israeli delegation — and Ghassan Alyan, coordinator of government operations in the Palestinian territories, took a leading role in the meetings.

The deal would see an Egyptian company facilitating natural gas production in the offshore fields.

Gaza Marine is estimated to hold over 1 trillion cubic feet of natural gas, much more than is needed to power the Palestinian territories.

The Ramallah-based Palestinian Authority — represented by the sovereign wealth vehicle Palestine Investment Fund or PIF — will gain 27.5 percent of profits from the field.

The PIF’s partner, the Palestinian-owned Consolidated Contractors Company or CCC, will get another 27.5 percent.

The remaining 45 percent will go to the Egyptian Natural Gas Holding Co. or EGAS, which will operate the project.

The Israeli TV channel indicated that Tel Aviv expects Palestinians to gain economically from the latest step, which might contribute to reducing security tensions in the long run.

Economist Hamed Jad hoped a deal could be finalized by the end of the year.

“The Palestinian attempts, since the discovery of gas fields off the shores of Gaza, have continued ever since but every time there are new obstacles. Now the issue has come up again,” Jad told Arab News.

He said that a final agreement should include an understanding with Hamas — the de facto ruler of Gaza — to avoid further challenges in the field’s operations.

Hamas spokesman Hazem Qassem said: “We are following up on all developments related to the gas issue and the agreements.”

He added: “Our people’s right to benefit from its natural resources and gas is guaranteed in all international laws and resolutions.”

The Gaza gas fields were first discovered in 1999 in Palestinian territorial waters.

The first discovery was called Gaza Marine 1 and contains an estimated 33 billion cubic meters 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 3 billion cubic meters.

The fields have long been seen as a major stepping stone toward Palestinian energy independence but they remained untapped mainly due to Israeli objections and obstacles.

The offshore fields can help Gaza’s power station switch from oil to gas, which would increase its operational capacity.

In November 1999, a 25-year contract for gas exploration and development of gas fields was signed between the British Gas Group or BG Group, the CCC and the PIF.

BG Group withdrew from the project in 2016 and handed it over to Shell, which withdrew from the agreement in 2018 due to various disputes.

In 2021, the PA signed a memorandum of understanding with Egypt to develop the Gaza gas field and the necessary infrastructure.

Since 2016, the Gaza Strip has been suffering from a severe shortage of electricity as a result of the Israeli bombing of the only station at the time.

There has also been a lack of funds to finance the petrol needed to operate the station amid the 16-year-long Israeli-led blockade.