BG Group (NYSE: BRG; LSE: BG) (British Gas) CEO Frank Chapman has reportedly told a meeting of the US-Egypt Chamber of Commerce that his company was in talks with the Egyptian government for the export to Egypt of gas from its offshore reserves in Gaza.
Chapman said that British Gas preferred to channel the gas to Egypt, convert it to liquefied natural gas, and export it to other countries. He added that this option was the most profitable for the company and the Palestinians.
Chapman’s statements is further confirmation of BG’s decision not to sell gas to Israel, despite the talks that the company’s representatives have been holding with government representatives in Israel.
People in the energy market have criticized the conduct of the government, and in particular the Ministry of National Infrastructures. A senior source said, “At the beginning of this decade, British Gas knocked on every possible door, offering to sell gas at a price of $2.3 per BTU. The Ministry of National Infrastructures didn’t take them seriously. They have only just woken up now.”
Another source added, “In the end, the decision on the supply of gas from British sources will be taken at the political level. It may well be that the Egyptians’ interest in maintaining stability in the Middle East will lead them to forego the deal.”
There has also been criticism of British Gas, which is accused of playing a double game by holding talks with both Israel and Egypt.
Israel currently has two natural gas suppliers, Yam Thetis, controlled by Yitzhak Tshuva, and Egypt’s Eastern Mediterranean Gas, in which Joseph (Yossi) Maiman is a partner. As a result of the scarcity of natural gas suppliers, and the rise in prices worldwide, the current price in Israel is around $4 per million BTU. This is cheap compared with prices elsewhere, but it is still high and does not allow for competition with Israel Electric Corporation, which bought gas at a price of $2.75 per BTU.
Published by Globes [online], Israel business news - www.globes.co.il - on September 13, 2006
© Copyright of Globes Publisher Itonut (1983) Ltd. 2006