Israeli Prime Minister Benjamin Netanyahu has officially asked Palestinian Authority President Mahmoud Abbas to resume negotiations on the sale of natural gas to Israel, Israeli government sources said Monday.
The sources said the request came last month after the explosion in the Sinai that shut down Egyptian gas supplies to Israel.
The Israeli proposal calls for negotiations on the sale of gas from the Gaza Marine field off the coast of Palestinian-controlled Gaza Strip and the adjacent Noa field which is in Israeli waters. UK-based BG Group holds a 60% stake in Gaza Marine. The remaining stake is held by the Houri family's Consolidated Contractors Company and the Palestine Investment Fund. Noa is owned by Noble Energy Inc, Delek Drilling and Avner Oil and Gas.
"We are monitoring developments but there is no change in our position," a BG spokesman told Platts. He added that BG wants to find a fair and equitable way to sell the gas. However the spokesman said he could not speculate on any possible timetable.
No agreement was reached in previous rounds of talks between Israel and BG on the sale of the gas from Gaza Marine. The field is estimated to have 32 billion cubic meters of gas. The adjacent Noa field has an estimated 7 billion to 8 billion cu m.
Israel and BG ceased negotiations in December 2008 over the sale of gas from the Marine field after failing to reach an agreement on price. Former Israeli National Infrastructure Ministry director general Hezi Kugler said that the price difference at the time was a mere $0.20/million BTU.
In early February Prime Minister Netanyahu raised the issue with Middle East envoy Tony Blair and that the gas could be used by Israel and the Palestinian Authority. Netanyahu said the two fields should be developed together due to their proximity.
Gaza Marine was discovered over 10 years ago. The cost of developing the field is put at $800 million. The Noa field is near Yam Thetis which produces gas from the Mary B well that is currently the sole supplier to the Israeli market following the cut off of Egyptian gas. Noble and Delek have refrained from developing the field over the years because of its questionable economic viability.
