Israel set to buy Gaza gas

BG Group executives will look to finalize a 15-year contract with Israeli officials.

BG Group (NYSE: BRG; LSE: BG) is poised to sign a $4 billion 15-year contract deal to supply Palestinian gas to Israel from a discovery off the Gaza coastline, London daily "The Times" reported yesterday.

"The Times" added that the contract "will provide 10% of Israel’s annual energy requirement, and the Palestinians would receive total royalties of $1 billion. The Gaza field, it said, "holds one trillion cubic feet of gas, the equivalent of 150 million barrels of oil, equivalent to a large North Sea field."

Representatives from BG Group are scheduled next week to meet a team of negotiators chosen by the Israeli government. However "The Times" said that local sources had informed it that, "the sensitive talks could be derailed at any time by the acute political tension that surrounds the deal."

BG regional VP Nigel Shaw said, "We are making progress. There are commercial issues to be completed and we also require bilateral agreement between the two governments to get this project across the line. But this is a chance for greater economic prosperity in Palestine and that is only good for peace.”

Published by Globes [online], Israel business news - www.globes.co.il - on May 24, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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