Saturday, January 31, 2009

Gaza marine project - and who owns it?

Gas is one of the most important natural resources in Palestine. Since its discovery, offshore Gaza Gas has been regarded as a unique project in Palestine, in view of the fact that Gaza Gas is the only mineral resource found in the Palestinian Territory. The natural gas reserves constitute an important and strategic source for the Palestinian economy.

In 1999, the Palestinian National Authority (PNA) has exclusively awarded the area offshore Gaza for hydrocarbons exploration and marketing to British Gas (BG)/Consolidated Contractors Company Oil and Gas S.A.L (CCC) consortium (the developers). The award was granted pursuant to the agreements signed between the PNA and the developers, granting the latter the exclusive rights to produce, process and sell commercial discoveries in the license area for a period of 25 years to start upon approval of a field development plan.

In 2000, the developers announced the discovery of proven commercial gas reserves in the Gaza Marine Field, and proven commercial gas reserves in the Border field; a field that is in territorial waters of both Gaza and Israel. The developers are currently negotiating the terms of two Gas Sale Agreements, after which only one agreement will be approved and signed between relevant parties.

Among other positive aspects of the Gaza Gas project, in addition to injecting large funds into the local economy, development of the gas fields and exporting natural gas will send positive signals about the investment environment in Palestine. Success of the Gaza Gas project will enhance investors confidence in the Palestinian national economy as a result of the complicated nature of this project and the cross-border transactions and commitments it requires. Replacing gasoline with gas at the Palestine Electric Company in Gaza will reduce the current bill that the Palestinian National Authority pays to Israel to provide Palestinians in Gaza with electricity.